10-Q

o

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number: 001-39119

Leafly Holdings, Inc.

(Exact name of registrant as specified in its charter)

_____________________________

Delaware	84-2266022
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
113 Cherry Street, PMB 88154 Seattle, Washington	98104-2205
(Address of principal executive offices)	(Zip Code)

(206) 455-9504

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 Par Value	LFLY	The Nasdaq Stock Market LLC
Warrants, exercisable for shares of common stock at an exercise price of $11.50 per share	LFLYW	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.)    Yes  ☒    No  ☐

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes ☐  No  ☒ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of November 4, 2022, the registrant had 40,035,568 shares of common stock ($0.0001 par value) outstanding, net of treasury stock.

Table of Contents

		Page
Part I	Financial Information	3
Item 1.	Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 (audited)	3
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021	4
	Condensed Consolidated Statements of Changes in Stockholders Equity (Deficit) for the Three and Nine Months Ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35
Part II	Other Information	37
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39
Signatures		39

1

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report contains a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of present or historical fact included in or incorporated by reference in this Quarterly Report, regarding Leafly Holdings, Inc.’s (the “Company’s”) future financial performance, as well as the Company’s strategy, future operations, future operating results, financial position, estimated revenues, and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “expect,” “anticipate,” “contemplate,” “believe,” “estimate,” “intend,” “project,” “budget,” “forecast,” “anticipate,” “plan,” “may,” “will,” “could,” “should,” “predict,” “potential,” and “continue” or similar words. These forward-looking statements include all matters that are not historical facts. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. You should read statements that contain these words carefully because they:

•discuss future expectations;

•contain projections of future results of operations or financial condition; or

•state other “forward-looking” information.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report.

All forward-looking statements included herein attributable to the Company or any person acting on the Company’s behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. These cautionary statements are being made pursuant to federal securities laws with the intention of obtaining the benefits of the “safe harbor” provisions of such laws. Except to the extent required by applicable laws and regulations, the Company undertakes no obligations to update these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report or to reflect the occurrence of unanticipated events.

There may be events in the future that the Company is not able to predict accurately or over which it has no control. The section in the Company’s Annual Report on Form 10-K for the year ended 2021 entitled “Risk Factors,” and the section of this Quarterly Report entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the other cautionary language discussed in this report provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described by the Company in such forward-looking statements. These examples include:

•the Company’s inability to raise sufficient capital to execute its business plan;

•the size, demands and growth potential of the markets for the Company’s products and services and the Company’s ability to serve those markets;

•the impact of worldwide economic conditions, including the resulting effect on consumer spending at local businesses and the level of advertising spending by local businesses;

•the degree of market acceptance and adoption of the Company’s products and services;

•the Company’s ability to attract and retain customers;

•the Company’s ability to raise financing in the future;

•the Company’s success in retaining or recruiting officers, key employees or directors;

•the impact of the regulatory environment and complexities with compliance related to such environment, including compliance with restrictions imposed by federal law; and

•factors relating to the business, operations and financial performance of the Company and its subsidiaries.

2

Part I - Financial Information

Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

LEAFLY HOLDINGS, INC

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	September 30, 2022		December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	27,829	$	28,565
Accounts receivable, net of allowance for doubtful accounts of $958 and $1,848, respectively	2,610		2,958
Deferred transaction costs	—		2,840
Prepaid expenses and other current assets	3,569		1,347
Restricted cash	607		130
Total current assets	34,615		35,840
Property, equipment, and software, net	2,213		313
Total assets	$	36,828	$	36,153
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$	1,375	$	3,048
Accrued expenses and other current liabilities	5,076		8,325
Deferred revenue	2,052		1,975
Current portion of convertible promissory notes, net	—		31,377
Total current liabilities	8,503		44,725
Non-current liabilities
Non-current portion of convertible promissory notes, net	28,726		—
Private warrants derivative liability	662		—
Escrow shares derivative liability	47		—
Stockholder earn-out rights derivative liability	288		—
Total non-current liabilities	29,723		—
Commitments and contingencies (Note 8)
Stockholders' deficit
Preferred stock; $0.0001 par value; 5,000 and 6,578 authorized, — and 6,140 issued and outstanding, and aggregate liquidation preference of $— and $19,436 at September 30, 2022 and December 31, 2021, respectively	—		1
Common stock; $0.0001 par value; 200,000 and 69,361 authorized at September 30, 2022 and December 31, 2021, respectively; 43,052 issued at September 30, 2022 and 25,086 shares issued and outstanding at December 31, 2021	4		3
Treasury stock, at cost; 3,081,086 and — shares held at at September 30, 2022 and December 31, 2021, respectively	(31,663)		—
Additional paid-in capital	89,194		61,194
Accumulated deficit	(58,933)		(69,770)
Total stockholders' deficit	(1,398)		(8,572)
Total liabilities and stockholders' deficit	$	36,828	$	36,153

See Notes to Condensed Consolidated Financial Statements.

3

LEAFLY HOLDINGS, INC

CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

(in thousands, except per share amounts)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue	$	11,781	$	10,896	$	35,251	$	30,959
Cost of revenue	1,515		1,261		4,411		3,564
Gross profit	10,266		9,635		30,840		27,395
Operating expenses
Sales and marketing	6,403		4,999		21,529		13,148
Product development	3,406		3,522		10,927		9,905
General and administrative	6,489		4,949		20,730		10,485
Total operating expenses	16,298		13,470		53,186		33,538
Loss from operations	(6,032)		(3,835)		(22,346)		(6,143)
Interest expense, net	(705)		(590)		(2,119)		(698)
Change in fair value of derivatives	22,264		—		36,264		—
Other expense, net	(73)		(29)		(962)		(39)
Net income (loss)	$	15,454	$	(4,454)	$	10,837	$	(6,880)
Net income (loss) per share:
Basic	$	0.43	$	(0.18)	$	0.31	$	(0.28)
Diluted	$	0.28	$	(0.18)	$	0.27	$	(0.28)
Weighted average shares outstanding:
Basic	35,580		24,923		35,260		24,832
Diluted	43,215		24,923		38,704		24,832

See Notes to Condensed Consolidated Financial Statements.

4

LEAFLY HOLDINGS, INC

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) - UNAUDITED

(in thousands)

	Three and Nine Months Ended September 30, 2022
	Preferred Stock			Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2021	6,140	$	1	25,086	$	3	—	$	—	$	61,194	$	(69,770)	$	(8,572)
Net loss	—	—		—	—		—	—		—		(19,376)		(19,376)
Stock-based compensation	—	—		—	—		—	—		1,924		—		1,924
Exercise of stock options	—	—		114	—		—	—		127		—		127
Conversion of 2021 Notes into Common Stock at Merger	—	—		4,128	—		—	—		33,024		—		33,024
Conversion of Preferred Stock into Common Stock at Merger	(6,140)	(1)		6,140	1		—	—		—		—		—
Merger and recapitalization, net of fees	—	—		2,007	—		—	—		27,997		—		27,997
Stockholder contribution for debt issuance costs	—	—		—	—		—	—		924		—		924
Escrow shares derivative liability	—	—		1,625	—		—	—		(6,867)		—		(6,867)
Private warrants derivative liability	—	—		—	—		—	—		(3,916)		—		(3,916)
Forward share purchase agreement derivative liability	—	—		3,861	—		—	—		(14,170)		—		(14,170)
Stockholder earnout rights derivative liability	—	—		—	—		—	—		(26,131)		—		(26,131)
Balance at March 31, 2022	—	$	—	42,961	$	4	—	$	—	$	74,106	$	(89,146)	$	(15,036)
Net income	—	—		—	—		—	—		—		14,759		14,759
Stock-based compensation	—	—		—	—		—	—		464		—		464
Exercise of stock options	—	—		29	—		—	—		30		—		30
Balance at June 30, 2022	—	$	—	42,990	$	4	—	$	—	$	74,600	$	(74,387)	$	217
Net income	—	—		—	—		—	—		—		15,454		15,454
Shares canceled	—	—		(25)	—		—	—		—		—		—
Stock-based compensation	—	—		—	—		—	—		771		—		771
Exercise of stock options	—	—		1	—		—	—		1		—		1
Vesting of restricted stock units	—	—		86	—		—	—		—		—		—
Settlement of forward share purchase agreement derivative liability	—	—		—	—		—	—		(17,841)		—		(17,841)
Purchase of treasury stock	—	—		—	—		(3,081)	(31,663)		31,663		—		—
Balance at September 30, 2022	—	$	—	43,052	$	4	(3,081)	$	(31,663)	$	89,194	$	(58,933)	$	(1,398)

5

	Three and Nine Months Ended September 30, 2021
	Series A Preferred Stock			Class 1, Class 2, and Class 3 Common Stock			Additional Paid-In Capital		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2020	6,140	$	1	24,752	$	2	$	59,812	$	(57,746)	$	2,069
Net loss	—	—		—	—		—		(1,109)		(1,109)
Stock-based compensation	—	—		—	—		181		—		181
Exercise of stock options	—	—		36	—		40		—		40
Balance at March 31, 2021	6,140	1		24,788	2		60,033		(58,855)		1,181
Net loss	—	—		—	—		—		(1,317)		(1,317)
Stock-based compensation	—	—		—	—		340		—		340
Exercise of stock options	—	—		49	—		68		—		68
Balance at June 30, 2021	6,140	1		24,837	2		60,441		(60,172)		272
Net loss	—	—		—	—		—		(4,454)		(4,454)
Stock-based compensation	—	—		—	—		208		—		208
Exercise of stock options	—	—		142	—		142		—		142
Balance at September 30, 2021	6,140	$	1	24,979	$	2	$	60,791	$	(64,626)	$	(3,832)

See Notes to Condensed Consolidated Financial Statements.

6

LEAFLY HOLDINGS, INC

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(in thousands)

	Nine Months Ended September 30,
	2022		2021
Cash flows from operating activities
Net income (loss)	$	10,837	$	(6,880)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	276		195
Stock-based compensation expense	3,159		729
Bad debt expense	1,023		841
Noncash lease costs	—		230
Noncash amortization of debt discount	369		—
Noncash interest expense associated with convertible debt	243		710
Noncash change in fair value of derivatives	(36,264)		—
Other	15		44
Changes in operating assets and liabilities:
Accounts receivable	(675)		(674)
Prepaid expenses and other current assets	(2,222)		(600)
Accounts payable	173		(3)
Accrued expenses and other current liabilities	(2,141)		1,713
Deferred revenue	77		594
Net cash used in operating activities	(25,130)		(3,101)
Cash flows from investing activities
Additions of property, equipment, and software	(2,194)		(38)
Net cash used in investing activities	(2,194)		(38)
Cash flows from financing activities
Proceeds from exercise of stock options	158		223
Proceeds from convertible promissory notes	29,374		31,470
Proceeds from business combination placed in escrow and restricted	39,032		—
Trust proceeds received from recapitalization at closing	582		—
Repurchase of common stock and settlement of forward purchase agreements	(31,303)		—
Transaction costs associated with recapitalization	(10,761)		—
Payments on related party payables	(17)		(242)
Net cash provided by financing activities	27,065		31,451
Net (decrease) increase in cash, cash equivalents, and restricted cash	(259)		28,312
Cash, cash equivalents, and restricted cash, beginning of period	28,695		4,934
Cash, cash equivalents, and restricted cash, end of period	$	28,436	$	33,246
Supplemental disclosure of non-cash financing activities
Stockholder contribution for debt issuance costs	$	924	$	—
Repurchase of common stock in other accrued expenses	$	360	$	—
Conversion of promissory notes into common stock	$	33,024	$	—
Issuance of forward share purchase agreements	$	14,170	$	—
Issuance of private warrants	$	3,916	$	—
Issuance of sponsor shares subject to earnout conditions	$	6,867	$	—
Issuance of stockholder earn-out rights	$	26,131	$	—

    See Notes to Condensed Consolidated Financial Statements.

7

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

(in thousands, except per share amounts)

NOTE 1 — Description of the Business and Merger Transaction

Description of the Business

Leafly Holdings, Inc. (“Leafly” or “the Company”) is a leading online cannabis discovery marketplace and resource for cannabis consumers. Leafly provides an information resource platform with a deep library of content, including detailed information about cannabis strains, retailers and current events. Leafly was incorporated in the state of Delaware on June 20, 2019 and is headquartered in Seattle, Washington.

The Company has two wholly-owned subsidiaries, Leafly Canada Ltd. (“Leafly Canada”) and Leafly, LLC (“Legacy Leafly”). Legacy Leafly is the accounting predecessor of Leafly. The accompanying condensed consolidated financial statements include the financial results of the Company and its wholly-owned subsidiaries.

Merger with Merida

On February 4, 2022, Leafly consummated the previously announced Mergers and related transactions (collectively, the “Merger”) pursuant to the Agreement and Plan of Merger dated August 9, 2021 and amended on September 8, 2021 and on January 11, 2022 (as amended, the “Merger Agreement”). Legacy Leafly (formerly known as Leafly Holdings, Inc.) entered into the Merger Agreement with Merida Merger Corp. I (“Merida”), Merida Merger Sub, Inc., a Washington corporation (“Merger Sub I”), Merida Merger Sub II, LLC, a Washington limited liability company (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”). Merger Sub I merged with and into Legacy Leafly, with Legacy Leafly surviving as a wholly-owned subsidiary of Merida, and following the initial Merger and as part of a single integrated transaction with the initial Merger, Legacy Leafly merged with and into Merger Sub II, with Merger Sub II surviving as a wholly-owned subsidiary of Merida. As a result of these Mergers, Legacy Leafly became a wholly owned subsidiary of Merida and was renamed Leafly, LLC, Merida was renamed Leafly Holdings, Inc. (“New Leafly”), and the securityholders of Legacy Leafly became security holders of Merida. We sometimes refer to the Mergers described above and the other transactions contemplated by the Merger Agreement and the other agreements being entered into by Merida and Legacy Leafly in connection with the Mergers as the “Business Combination” and to Merida following the Business Combination as “New Leafly.”

While the legal acquirer in the Business Combination is Merida, for financial accounting and reporting purposes under U.S. GAAP, Legacy Leafly is the accounting acquirer with the Merger accounted for as a “reverse recapitalization.” A reverse recapitalization does not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of the financial statements of Legacy Leafly. Under this accounting method, Merida is treated as the “acquired” company and Legacy Leafly is the accounting acquirer, with the transaction treated as a recapitalization of Legacy Leafly. Merida’s assets, liabilities and results of operations were consolidated with Legacy Leafly’s beginning on the date of the Business Combination. Except for certain derivative liabilities, the assets and liabilities of Merida were recognized at historical cost (which is consistent with carrying value) and were not material, with no goodwill or other intangible assets recorded. The derivative liabilities, which are discussed in Notes 12 and 13, were recorded at fair value. The consolidated assets, liabilities, and results of operations of Legacy Leafly became the historical financial statements, and operations prior to the closing of the Business Combination presented for comparative purposes are those of Legacy Leafly. Pre-Merger shares of common stock and preferred stock were converted to shares of common stock of the combined company using the conversion ratio of 0.3283 and for comparative purposes, the shares and net loss per share of Legacy Leafly, prior to the Merger, have been retroactively restated using the conversion ratio.

The following table provides a summary of the significant sources and uses of cash related to the closing of the Business Combination on February 4, 2022 and the cash received from escrow through September 30, 2022:

8

Amount in Merida's trust account ("the Trust") at closing	$	90,824
Total payment to Merida public redeeming stockholders	49,466
Amount available after paying Merida redeeming stockholders	41,358
Cash to escrow for Forward Share Purchase Agreements (see Note 13)	39,032
Remaining balance	2,326
Merida expenses paid from the Trust at closing	1,744
Net cash from the Trust to Leafly at closing	582
Cash received from escrow February 4, 2022 - September 30, 2022	8,089
Net cash from the Trust to Leafly as of September 30, 2022	$	8,671

The following table provides a reconciliation of the common shares related to the Merger transaction:

Merida public stockholders	4,160
Merida initial stockholders (including Sponsor and EarlyBirdCapital)	1,667
Holders of 2022 Notes (see Note 11)	38
Shares held by Sponsor in escrow that are subject to earn-out conditions (see Note 12)	1,625
Total Merida	7,490
Legacy Leafly existing securityholders	35,434
Total shares outstanding as of February 4, 2022	42,924

All shares in this table, except the shares held by Merida public stockholders and Holders of 2022 Notes, were subject to restrictions as to trading through August 3, 2022 ("Lock Up Restrictions").

NOTE 2 — Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and should be read in conjunction with the Company's audited consolidated financial statements for the years ended December 31, 2021 and 2020, and Management’s Discussion and Analysis of Financial Condition and Results of Operations of Leafly for the year ended December 31, 2021, each of which was filed on the company’s Amendment No. 1 on Form 8-K/A filed with the SEC on March 31, 2022 (the “2021 Financial Information”).

These condensed consolidated financial statements are unaudited and, in management's opinion, include all adjustments, consisting of normal recurring estimates and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. Actual results may differ from these estimates and assumptions. The results of operations for any interim periods are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting. All intercompany balances and transactions have been eliminated upon consolidation.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported net income (loss).

Seasonality

We may experience seasonality in our business, which we believe has moderate impacts on our overall revenue. In certain years, we've seen seasonal fluctuations that coincide with either federal holidays, generally in the fourth quarter, or industry holidays and events, generally in the spring. Our industry and business history is limited and therefore we can't be certain that these are known trends or that other trends may develop.

9

Emerging Growth Company Status

Leafly is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued until such time as those standards apply to private companies. The Company has elected to use this extended transition period. In providing this relief, the JOBS Act does not preclude the Company from adopting a new or revised accounting standard earlier than the time that such standard applies to private companies. Leafly will continue to use this relief until the earlier of the date that it (a) is no longer an emerging growth company or (b) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

Significant Accounting Policies

The unaudited interim financial statements should be read in conjunction with the Company's 2021 Financial Information, which describes the Company's significant accounting policies. There have been no material changes to the Company's significant accounting policies during the three and nine months ended September 30, 2022 compared to our Annual Report on Form 10-K for the year ended December 31, 2021. However, certain items became material during the periods presented and therefore, we have disclosed the related accounting policies below. In addition, as a result of the Business Combination, the Company entered into certain derivative instruments that are accounted for as liabilities. These instruments and the related accounting are discussed in Notes 12, 13, and 20.

Capitalized Software

The Company capitalizes certain costs related to acquisition and development of software for internal use, including internal labor costs incurred during development. The Company begins to capitalize these costs when planning and design efforts are successfully completed and development is ready to commence. Costs incurred during planning and design, together with costs incurred for training and maintenance, are expensed as incurred and recorded in product development expense. The Company places capitalized software assets into service and commences amortization when the asset is substantially complete and ready for its intended use. Once placed into service, the Company capitalizes qualifying costs of specified upgrades or enhancements to the assets when the upgrade or enhancement will result in new or additional functionality.

The Company’s estimated useful life for capitalized software is 3 years, and amortization is calculated using the straight-line method. The Company considers the useful life of capitalized software to be a significant estimate.

Transaction Costs

The Company incurred significant costs direct and incremental to the Business Combination and therefore to the recapitalization of the Company. We deferred such costs incurred in 2021. In 2022, upon closing of the Business Combination, total direct transaction costs were allocated between equity and liability instruments measured at fair value on a recurring basis that were newly issued in the recapitalization. Amounts allocated to equity were recorded to additional paid-in capital, while amounts allocated to the specified liabilities were recorded as other expense.

Recent Accounting Pronouncements

As a result of the elected JOBS Act relief discussed above, these condensed consolidated financial statements may not be comparable to other companies that do not elect JOBS Act relief or choose to adopt certain accounting pronouncements during a different period than the Company.

Recently Adopted Accounting Standards

None.

Accounting Pronouncements Issued But Not Yet Adopted

Management does not believe that there are any recently issued, but not yet effective, accounting standards that, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements or related disclosures.

10

NOTE 3 — Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash consisted of the following:

	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	27,829	$	28,565
Restricted cash	607		130
	$	28,436	$	28,695

The September 30, 2022 restricted cash balance includes $360 of cash maintained in escrow related to Forward Share Purchase Agreements ("FPAs"). Effective August 1, 2022, the FPA holders elected to have Leafly repurchase their remaining 3,081 shares covered by the FPAs for an aggregate repurchase price of $31,663. As a result, the shares repurchased have been removed from Leafly's outstanding shares effective as of the date of purchase and placed into treasury. The FPA holders elected to have all but $360 disbursed from the escrow account and are able to claim the remainder any time until August 1, 2023. If unclaimed, the remaining funds in escrow will be distributed to the Company. Additional information regarding the FPAs is included in Notes 13 and 20.

NOTE 4 — Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

	September 30, 2022		December 31, 2021
Prepaid insurance	$	2,065	$	57
Other prepaid expenses	1,441		1,134
Other current assets	63		156
	$	3,569	$	1,347

NOTE 5 — Accounts Receivable, Net

Accounts receivable, net consists of amounts due from customers less an allowance for doubtful accounts. The following table presents the allowance for doubtful accounts and the changes therein:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of period	$	1,469	$	1,142	$	1,848	$	1,131
Add: provision for doubtful accounts, net of recoveries	383		529		1,023		841
Less: write-offs	(894)		(93)		(1,913)		(394)
Balance, end of period	$	958	$	1,578	$	958	$	1,578

NOTE 6 — Property, Equipment, and Software, Net

Property, equipment, and software consisted of the following:

	September 30, 2022		December 31, 2021
Furniture and equipment	$	902	$	1,049
Leasehold improvements	—		2
Internal-use software	2,081		—
	2,983		1,051
Less: accumulated depreciation and amortization	(770)		(738)
	$	2,213	$	313

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The Company recognized depreciation expense of $38 and $57 for the three months ended September 30, 2022 and 2021, respectively, and $135 and $195 for the nine months ended September 30, 2022 and 2021, respectively. Amortization of internal-use software was $90 and $0 for the three months ended September 30, 2022 and 2021, respectively, and $141 and $0 for the nine months ended September 30, 2022 and 2021, respectively.

Leases

The Company does not have any leases with an original term longer than twelve months as of September 30, 2022. The Company does rent office space under short-term arrangements, which are not material.

NOTE 7 — Accrued Expenses and Other Current Liabilities

Accrued expenses consist of the following:

	September 30, 2022		December 31, 2021
Accrued bonuses	$	537	$	3,668
Other employee-related liabilities	2,547		2,131
Accrued interest	400		1,313
Other accrued expenses 1	1,592		1,213
	$	5,076	$	8,325

1 There are no individual items within this balance that exceed 10% of the total of the table.

Accrued bonuses include those for executive officers of the Company. Historically, bonuses have been provided to executives on a discretionary basis. Bonus compensation is designed to hold executives accountable and reward them for individual and business performance. The Company offers an annual incentive program for its executive officers whereby they are eligible to receive target bonus payouts, of up to 50% for the CEO and 40% for other executive officers, of their base salary, with the actual bonus awarded based on a number of factors, including each executive’s individual performance, Leafly’s performance, current market and business climate, and Leafly’s financial circumstances, as determined by the Leafly board of directors.

NOTE 8 — Commitments and Contingencies

In the normal course of business, the Company may receive inquiries or become involved in legal disputes regarding various litigation matters. In the opinion of management, any potential liabilities resulting from such claims would not have a material adverse effect on the Company’s condensed consolidated financial statements.

NOTE 9 — Revenue and Contract Balances

The following table presents the Company's revenue by service type:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Advertising	$	11,731	$	10,840	$	34,959	$	30,813
Other services	50		56		292		146
	$	11,781	$	10,896	$	35,251	$	30,959

The following table presents the Company's revenue by geographic region:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
United States1	$	11,140	$	9,757	$	32,787	$	27,644
All other countries1	641		1,139		2,464		3,315
	$	11,781	$	10,896	$	35,251	$	30,959

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1 Calculated based on customer sold to address for the periods presented. Using the prior calculation based on billing entity address, revenue for the United States and All other countries would have been $11,335 and $446 for the three months ended September 30, 2022, $10,041 and $855 for the three months ended September 30, 2021, $33,491 and $1,760 for the nine months ended September 30, 2022, and $28,204 and $2,755 for the nine months ended September 30, 2021, respectively.

The following tables presents the Company's revenue by state:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Arizona	19	%	16	%	18	%	16	%
California	13	%	11	%	11	%	10	%
Oregon	10	%	11	%	10	%	12	%

No other state comprised 10% or more of Leafly’s revenue during the three and nine months ended September 30, 2022 and 2021. We have a diversified set of customers; no single customer accounted for 10% or more of our revenue for the three and nine months ended September 30, 2022 and 2021.

The following table presents the Company's revenue by timing of recognition:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Over time
Retail1	$	9,042	$	8,606	$	27,286	$	24,572
Brands2	1,759		1,581		5,067		4,591
	$	10,801	$	10,187	$	32,353	$	29,163
Point in time
Brands3	980		709		2,898		1,796
	$	11,781	$	10,896	$	35,251	$	30,959

1 Revenues from subscription services and display ads.

2 Revenues from brand profile subscriptions and digital media (including display ads and audience extension).

3 Revenues from branded content and channel advertising (including direct to consumer email).

Revenues recognized over time are associated with software subscriptions, display ads and audience extension. Revenues recognized at a point in time are associated with branded content and channel advertising. There are no material variations in delivery and revenue recognition periods within the over time category.

Contract liabilities consist of deferred revenue, which is recorded on the Consolidated Balance Sheets when the Company has received consideration, or has the right to receive consideration, in advance of transferring the performance obligations under the contract to the customer.

The following table presents the Company's deferred revenue accounts and changes in the deferred revenue accounts

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of period	$	2,467	$	2,079	$	1,975	$	1,585
Add: net increase in current period contract liabilities	1,630		1,947		1,976		2,112
Less: revenue recognized from beginning balance	(2,045)		(1,847)		(1,899)		(1,518)
Balance, end of period	$	2,052	$	2,179	$	2,052	$	2,179

A majority of the deferred revenue balance as of September 30, 2022 is expected to be recognized in the subsequent 12-month period. No other contract assets or liabilities are recorded on the Company’s Consolidated Balance Sheets as of September 30, 2022 or December 31, 2021.

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NOTE 10 — Income Taxes

The Company’s effective tax rate was 0% for the three and nine months ended September 30, 2022 and 2021. The effective tax rate was lower than the U.S. federal statutory rate of 21% due to the Company’s full valuation allowance recorded against its deferred tax assets.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has been subject to income tax examinations by major taxing authorities since inception.

As a result of the Business Combination, the Company’s federal, state, and foreign net operating loss carryforwards were $53,904, $35,976 and $4,303, respectively, as of December 31, 2021. Federal and state tax laws impose substantial restrictions on the utilization of net operating loss carryforwards in the event of an "ownership change" as defined in Section 382 of the Internal Revenue code. Such a limitation could result in limitation in the use of the net operating losses in future years and possibly a reduction of the net operating losses available.

NOTE 11 — Convertible Promissory Notes

2022 Notes

Merida entered into a $30,000 convertible note purchase agreement in January 2022, which Legacy Leafly subsequently guaranteed and joined as a party to the agreement on February 4, 2022 in connection with the Business Combination (the “2022 Notes”). Accordingly, post-Business Combination, the 2022 Notes are presented as a liability on Leafly's balance sheet, net of debt issuance costs and debt discount. The Company recognized debt issuance costs of $714 paid in cash, and a debt discount of $924 paid in shares transferred by the Sponsor to the holders of the 2022 Notes upon issuance. The 2022 Notes bear interest at 8% annually, paid in cash semi-annually in arrears on July 31 and January 31 of each year, and mature on January 31, 2025.

The 2022 Notes are unsecured convertible senior notes due 2025. They are convertible at the option of the holders at any time before maturity at an initial conversion share price of $12.50. In addition, the Company may, at its election, force the conversion of the 2022 Notes on or after January 31, 2024, if the volume-weighted average trading price of the Company’s common stock exceeds $18.00 for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days. The Company also has the option, on or after January 31, 2023 and prior to the 40th trading day immediately before the maturity date and subject to the holders’ ability to optionally convert, to redeem all or a portion of the 2022 Notes at a cash redemption price equal to 100% of the principal amount of the 2022 Notes, plus accrued and unpaid interest, if any. The holders of the 2022 Notes have the right to cause the Company to repurchase for cash all or a portion of the 2022 Notes held by such holder upon the occurrence of a “fundamental change” (as defined) or in connection with certain asset sales, in each case at a price equal to 100% of par plus accrued and unpaid interest, if any.

As of September 30, 2022, the net carrying amount of the 2022 Notes was $28,726, which includes unamortized issuance costs and debt discount of $1,274. The estimated fair value of the convertible debt instruments was approximately $23,000 as of September 30, 2022. The fair value was measured using a combination of an income approach and Black-Scholes model, both of which are considered Level 3 inputs in the fair value hierarchy.

2021 Notes

Legacy Leafly issued a series of convertible promissory notes in June 2021 totaling approximately $23,970. In August 2021, Legacy Leafly issued additional convertible promissory notes totaling $7,500 to Merida Capital, an affiliate of Merida. (Both note issuances are collectively referred to below as the “2021 Notes”).

The 2021 Notes bore interest at 8% annually and were considered traditional convertible debt with the entire amount recognized as a liability (with no amount allocated to equity), reduced for direct issuance costs, with initial and subsequent recognition at amortized cost in accordance with the interest method. Unless converted, the entire balance of principal and accrued but unpaid interest was due on December 3, 2022. The 2021 Notes were contingently convertible upon the occurrence of certain events, to include a qualified financing, a non-qualified financing, or in a qualified public transaction.

On February 4, 2022, in connection with the Business Combination, the 2021 Notes were converted to approximately 4,128 shares of Leafly common stock at the conversion price of approximately $2.63, which was 80% of the implied price per share of common stock in the Business Combination. Upon closing of the Business Combination, the shares of common

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stock then converted to shares of common stock of the combined company using the conversion ratio of 0.3283, which was used for conversion of all Leafy securities.

NOTE 12 — Stockholders’ Equity

The Consolidated Statements of Changes in Stockholders' Equity (Deficit) reflect the reverse recapitalization on February 4, 2022, as discussed in Note 1. Since the Company was determined to be the accounting acquirer in the transaction, all periods presented prior to consummation of the transaction reflect the historical activity and balances of Leafly, Inc. (other than common and preferred stock and potentially issuable shares underlying stock options and convertible promissory notes, which have been retroactively restated).

Common Stock

On February 4, 2022, the Business Combination was consummated pursuant to the Merger Agreement. Prior to the Business Combination, Legacy Leafly's capital stock consisted of Series A preferred stock and common stock. Upon the consummation of the Business Combination, all issued and outstanding shares of Series A preferred stock converted to shares of nonredeemable common stock.

As of September 30, 2022 Leafly's authorized capital stock consisted of:

•200,000 shares of Leafly common stock, $0.0001 par value per share; and

•5,000 shares of Leafly preferred stock, $0.0001 par value per share.

Voting Rights

The holders of Leafly common stock exclusively possess all stockholder voting power with respect to Leafly, except as otherwise required by law or the Company's charter. Holders of Leafly common stock are entitled to one vote per share on each matter properly submitted to a vote of stockholders. The holders of Leafly common stock will at all times vote together as one class on all matters submitted to a vote of stockholders, unless otherwise required by Delaware law or the charter. If Leafly has multiple classes of common stock in the future, then Delaware law could require holders of shares of a class of capital stock to vote separately as a single class in the following circumstances:

•if we were to seek to amend the charter to increase or decrease the par value of a class of the capital stock, then that class would be required to vote separately to approve the proposed amendment; and

•if we were to seek to amend the charter in a manner that alters or changes the powers, preferences, or special rights of a class of capital stock in a manner that affected its holders adversely, then that class would be required to vote separately to approve the proposed amendment.

Election of Directors

The charter provides for a classified board of directors that is divided into three classes with staggered three-year terms. Only the directors in one class are subject to election by a plurality of the votes cast at each annual meeting of stockholders, with the directors in the other classes continuing for the remainder of their respective three-year terms. The charter does not provide for cumulative voting for the election of directors.

Dividend Rights

Subject to the rights, if any, of the holders of any outstanding series of the Leafly preferred stock, the holders of Leafly common stock are entitled to receive dividends and other distributions (payable in cash, property or capital stock of Leafly) when, as and if declared by the Leafly board of directors out of any assets or funds legally available and will share equally on a per share basis in such dividends and distributions.

No Preemptive or Similar Rights

Leafly common stock is not entitled to preemptive rights, and is not subject to conversion, redemption or sinking fund provisions.

Liquidation, Dissolution and Winding Up

In the event of any voluntary or involuntary liquidation, dissolution or winding-up, after payment or provision for payment of the debts and other liabilities of Leafly, the holders of Leafly common stock will be entitled to receive all the remaining

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assets of Leafly available for distribution to its stockholders, ratably in proportion to the number of shares of the Leafly common stock held by them, subject to the rights, if any, of the holders of any outstanding shares of Leafly preferred stock.

Sponsor Shares Subject to Earn-Out Conditions

In accordance with the Merger Agreement, upon closing of the Business Combination, 1,625 of the shares held by the Sponsor were placed in escrow and subjected to earn-out conditions ("Escrow Shares"). Of these Escrow Shares, 50% will be released from escrow if and when the Company's common stock trades at or above $13.50 at any time during the two-year period following closing, and the remaining 50% will be released from escrow if and when the Company's common stock trades at or above $15.50 at any time during the three-year period following closing. In addition, all 1,625 Escrow Shares will be released upon a change in control.

We account for the Escrow Shares as derivative liabilities, remeasured to fair value on a recurring basis, with changes in fair value recorded to earnings. See Note 20 for additional information.

Lock Up Restrictions

In accordance with various legal documents, the majority of our Common Stock was subject to restrictions on trading through August 3, 2022. See Note 1 for detail on Common Stock previously subject to Lock Up Restrictions.

Treasury Stock

Effective August 1, 2022, the Company repurchased 3,081 shares of its common stock at a weighted-average price of $10.28 per share for a total of $31,663, with $31,303 paid with restricted cash and $360 remaining in accrued expenses and other current liabilities on our consolidated balance sheet at September 30, 2022. These repurchases were in settlement of the Forward Purchase Agreements. See Notes 3 and 13 for additional information.

Stockholder Earn-Out Rights

Leafly stockholders, as of immediately prior to the closing of the Business Combination, were granted upon closing of the Business Combination, contingent rights to receive up to 5,429 shares of common stock (the "Rights") if the Company achieves certain earn-out conditions prior to the third anniversary of the Business Combination. We will account for the Rights as derivative liabilities, which we will remeasure to their current fair value as of the end of each reporting period, with changes in the fair value recorded to earnings. See Note 20 for additional information.

The Rights will be earned and shares of common stock will be issued as follows:

First Tranche

Up to 2,715 shares will be issued if and when:

•revenue for the year ending December 31, 2022 equals or exceeds $65,000 (first revenue target), or

•the date on which the volume-weighted average price of common stock for a period of at least 20 days out of 30 consecutive trading days ending on the trading day immediately prior to the date of determination is greater than or equal to $13.50 during the two-year period beginning on the trading day after the closing date of the Merger (as adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to shares of common stock occurring at or after the Closing), or

•a change of control occurs within the two years after the closing date of the Business Combination at the first target price or higher, or

•a pro rata portion of 2,715 shares (50%) if the revenue during the target period meets or exceeds 90% of the first revenue target.

Second Tranche

Up to 2,715 shares will be issued if and when:

•revenue for the year ending December 31, 2023 equals or exceeds $101,000 (second revenue target), or

•the date on which the volume-weighted average price of common stock for a period of at least 20 days out of 30 consecutive trading days ending on the trading day immediately prior to the date of determination is greater than or equal to $15.50 during the three-year period beginning on the trading day after the closing date of the Merger

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(as adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to shares of common stock occurring at or after the Closing), or

•a change of control occurs within the three years after the closing date of the Business Combination at the second target price or higher, or

•a pro rata portion of 2,715 (50%) if the revenue during the second target period meets or exceeds 90% of the second revenue target.

If the second revenue or price target is met in full, the respective first target will be deemed to have been met as well if it had not been met during the first period.

Preferred Stock

The Leafly board of directors is authorized, subject to limitations prescribed by the law of the State of Delaware, to issue Leafly preferred stock from time to time in one or more series. The Leafly board of directors is authorized to establish the number of shares to be included in each such series and to fix the voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The Leafly board of directors is able, without stockholder approval, to issue Leafly preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the Leafly common stock and could have anti-takeover effects. The ability of the Leafly board of directors to issue Leafly preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of Leafly or the removal of existing management. Leafly did not have any issued and outstanding shares of preferred stock as of September 30, 2022.

NOTE 13 — Warrants and Forward Share Purchase Agreements

Public Warrants

As of both September 30, 2022 and December 31, 2021, there were 6,501 warrants outstanding that had been included in the units issued in Merida’s initial public offering (the "Public Warrants"). Each Public Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a merger or (b) 12 months from the closing of the IPO. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock.

Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of a merger, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a merger or earlier upon redemption or liquidation.

Once the warrants become exercisable, the Company may redeem the Public Warrants:

•in whole and not in part;

•at a price of $0.01 per warrant;

•upon not less than 30 days’ prior written notice of redemption;

•if, and only if, the reported last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to the warrant holders; and

•If, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

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Private Warrants

As of both September 30, 2022 and December 31, 2021, there were 3,950 warrants outstanding that Merida had sold to the Sponsor and EarlyBirdCapital in a private placement that took place simultaneously with Merida’s initial public offering ("the Private Warrants"). The Private Warrants are identical to the Public Warrants, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants were not transferable, assignable or salable until after the completion of the Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants.

We account for the Private Warrants as derivative liabilities, remeasured to fair value on a recurring basis, with changes in the fair value recorded to earnings. See Note 20 for additional information.

Forward Share Purchase Agreements

In December 2021 and January 2022, the Company entered into four separate FPAs with certain investors. The FPAs allowed the investors to sell and transfer common stock held by the investors, not to exceed a total of 4,000 shares in aggregate, to the Company in exchange for cash. The price to be paid by the Company was initially $10.16 per share for up to 2,600 shares and $10.01 per share for up to 1,400 shares. As required by the FPAs, $39,032 of cash was placed into escrow upon closing of the Business Combination, to be used for the share purchases. If the FPAs were not exercised by the holders within their terms of three months post-Business Combination closing, the associated funds were to be released from escrow to the Company. We account for the FPAs as derivative liabilities, remeasured to fair value on a recurring basis, with changes in the fair value recorded to earnings.

On May 3, 2022, Leafly and the holders entered into amendments to the FPAs (the “Amended FPAs”). The Amended FPAs modified the price at which the applicable holder has the right, but not the obligation, to have Leafly repurchase certain shares held by the applicable holder as of the closing of the Business Combination and not later sold into the market to a price of $10.16 per share (with respect to 686 of the shares subject to the Amended FPAs) and $10.31 per share (with respect to 2,404 of the shares subject to the Amended FPAs). The Amended FPAs also modified the date by which such holders may elect to have Leafly repurchase their shares to August 1, 2022. In connection with the Amended FPAs, certain amendments were also made to the escrow agreements in respect to the escrow accounts.

During the three and nine months ended September 30, 2022, $720 and $8,089, respectively, was released from the escrow accounts due to the FPA holders selling shares in the open market, which was accordingly reclassified on the Company's balance sheet from restricted cash to cash.

Effective August 1, 2022, the FPA holders elected to have Leafly repurchase their remaining 3,081 shares covered by the FPAs for an aggregate repurchase price of $31,663. As a result, the shares repurchased have been removed from Leafly's outstanding shares effective as of the date of purchase and placed into treasury. The FPA holders elected to have all but $360 disbursed from the escrow account and are able to claim the remainder any time until August 1, 2023. If unclaimed, the remaining funds in escrow will be distributed to the Company. Also, in connection with the settlement, 25 shares held by Merida Holdings, LLC were canceled, according to an agreement between the Company and Merida Holdings, LLC entered into upon execution of the FPAs.

NOTE 14 — Equity Incentive Plans

The Company currently has four equity plans: the New Leafly 2021 Equity Incentive Plan (the “2021 Plan”), the Legacy Leafly 2018 Equity Incentive Plan (the “2018 Plan”), the New Leafy Earn Out Plan (“Earn Out Plan”), and the New Leafly 2021 Employee Stock Purchase Plan (the “ESPP”), which are discussed in this Note 14 and in Note 15. Awards under the

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2021 Plan are detailed below. There were no options or other equity awards granted under the 2018 Plan during the three and nine months ended September 30, 2022.

2021 Plan

The 2021 Plan became effective immediately upon closing of the Business Combination. Pursuant to the 2021 Plan, 4,502 shares of common stock were initially reserved for issuance. During the term of the 2021 Plan, the number of shares of common stock thereunder automatically increases on each January 1, commencing on January 1, 2023, and ending on (and including) January 1, 2031, by the lesser of (i) 10% of the fully diluted shares of common stock as of the last day of the preceding fiscal year and (ii) 4,502 shares (adjusted pursuant to the terms of the 2021 Plan).

In August 2022, the Company’s compensation committee of the board of directors or an authorized executive of the Company granted stock options to purchase an aggregate of approximately 101 shares of common stock at an exercise price of $1.98 per share and granted 1,228 restricted stock units. Prior to such grants, no grants had been made under the 2021 Plan. See Note 21 for awards subsequent to September 30, 2022.

The fair value of each stock option award to employees is estimated on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used as inputs to the pricing model for options granted during the three and nine months ended September 30, 2022:

Risk-free interest rate	4.1	%
Expected term in years	4.06
Expected volatility	74.6	%
Expected dividend yield	0.0	%

Stock option activity under the 2021 Plan for the three months ended September 30, 2022 (there were no stock options granted previously under this plan) was as follows:

	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Outstanding at June 30, 2022	—	$	—	$	—	—
Granted	101	1.98
Exercised	—	—
Forfeited or expired	—	—
Outstanding at September 30, 2022	101	$	1.98	$	—	9.89
Vested and exercisable	—	$	—	$	—	—

As of September 30, 2022, there was $114 of total unrecognized compensation cost related to stock options granted under the 2021 Plan. That cost is expected to be recognized over a weighted-average period of 3.36 years. The weighted-average grant date fair value of options granted under the 2021 Plan for the three and nine months ended September 30, 2022 was $1.16 per share.

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Restricted stock unit activity under the 2021 Plan for the three months ended September 30, 2022 (there were no restricted stock units granted previously under this plan) was as follows:

	Number of Shares	Weighted Average Grant Date Fair Value		Total Fair Value
Unvested at June 30, 2022	—	$	—
Granted	1,228	1.98		$	2,432
Vested	(173)	1.98		$	325
Forfeited	(65)	1.98
Unvested at September 30, 2022	990	$	1.98

As of September 30, 2022, there was $1,825 of total unrecognized compensation cost related to unvested restricted stock units granted under the 2021 Plan. That cost is expected to be recognized over a weighted-average period of 3.34 years.

2018 Plan

The 2018 Plan became effective on April 17, 2018. The 2018 Plan terminated upon closing of the Business Combination in 2022, but then outstanding options under the 2018 Plan remain outstanding pursuant to their terms, with adjustments to the number of shares and exercise prices to reflect the terms of the Business Combination.

In May 2021, the Company’s board of directors granted stock options under the 2018 Plan to purchase an aggregate of approximately 2,191 shares of common stock at an exercise price of $1.10 per share.

The fair value of each stock option award to employees is estimated on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used as inputs to the pricing model for options granted during the nine months ended September 30, 2021 (there were no grants made in 2022):

Risk-free interest rate	1.0	%
Expected term in years	5.90
Expected volatility	61.2	%
Expected dividend yield	0.0	%

Stock option activity under the 2018 Plan for the quarterly periods ended September 30, 2022 was as follows:

	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2022	3,851	$	1.77
Exercised	(114)	1.12
Forfeited or expired	(56)	1.08
Outstanding at March 31, 2022	3,681	$	1.78	$	23,918	8.62
Exercised	(29)	$	1.05
Forfeited or expired	(3)	$	2.30
Outstanding at June 30, 2022	3,649	$	1.78	$	11,307	8.35
Exercised	(5)	0.79
Forfeited or expired	(110)	7.75
Outstanding at September 30, 2022 1	3,534	$	1.60	$	84	8.29
Vested and exercisable	1,849	$	1.18	$	82	7.80

1 Includes 2,478, 0, and 1,056 of awards accounted for as service-based, performance-based, and market-based options, respectively, that are vested, that the Company currently deems probable of vesting, or in the case of market-based options, that the Company is expensing so long as the respective service conditions are met. The performance options vest only if gross revenue equals or exceeds certain thresholds for the years ending December 31, 2022 and 2023, while the market-based options will vest only if the price of the Company's common stock reaches a $1,000,000 market capitalization target for any 20 days during a 30-day period on or before the fourth anniversary of the closing of the Merger.

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As of September 30, 2022, there was: (i) $1,219 of unrecognized compensation cost related to service-based awards, which is expected to be recognized over a weighted-average service period of approximately 2.13 years; and (ii) $1,687 of unrecognized compensation cost related to market-based awards, which is expected to be recognized over a weighted-average service period of approximately 1.55 years.

The following tables presents the classification of stock-based compensation expense under the 2018 Plan and the 2021 Plan:

	Three Months Ended September 30, 2022				Nine Months Ended September 30,
	2022		2021		2022		2021
Sales and marketing	$	77	$	15	$	137	$	65
Product development	86		14		123		126
General and administrative	608		179		2,899		538
	$	771	$	208	$	3,159	$	729

Earn Out Plan

The Earn Out Plan became effective immediately upon closing of the Business Combination. Pursuant to the Earn Out Plan, approximately 571 shares of common stock have been reserved for issuance to employees and certain other eligible parties in the form of restricted stock units (“RSUs”). These RSUs will vest if the Company achieves certain thresholds prior to the third anniversary of the Merger. No RSUs have been awarded under the Earn Out Plan as of September 30, 2022.

Option Modification

Concurrent with the closing of the Business Combination, the vesting provisions of certain stock options previously granted in 2021 to our Chief Executive Officer to purchase 2,917 shares of common stock were modified, and a corresponding charge of $1,366 was recorded for the three months ended March 31, 2022 to general and administrative expenses and additional paid-in capital. The original award included the following vesting provisions:

•Liquidity Event Option: A stock option to purchase 1,458 shares of common stock will vest upon the earlier of (a) the closing of the Initial Public Offering of the Company's common stock or (b) a change in control, provided the recipient remains in continuous service.

•Milestone Option: A stock option to purchase 1,458 shares of common stock will vest one-third each upon the achievement of the three annual revenue targets of $75,000, $150,000 and $300,000, provided the recipient remains in continuous service.

The modified vesting provisions are as follows:

•Liquidity Event Option: A stock option to purchase 1,458 shares of common stock will vest as follows, provided the recipient remains in continuous service: 50% upon the closing of the Business Combination and 50% upon the earlier of (i) the Company's achievement of a $1,000,000 market capitalization for any 20 during a 30-day period on or before the fourth anniversary of the closing of the Business Combination (the "Market Cap Milestone") or (ii) a change in control.

•Milestone Option: A stock option to purchase 1,458 shares of common stock will vest upon the achievement of the following milestones, provided that the recipient remains in continuous service:

◦First Milestone: 50% of the total number of shares subject to the stock option will vest if the Company's gross revenue for the year ending December 31, 2022 equals or exceeds $65,000. A pro rata amount vests in the event that the Company's gross revenue equals or exceeds 90% of the revenue target.

◦Second Milestone: 50% of the total number of shares subject to the stock option will vest if the Company's gross revenue for the year ending December 31, 2023 equals or exceeds $101,000. A pro rata amount vests in the event that the Company's gross revenue equals or exceeds 90% of the revenue target.

◦In the event the Second Milestone is achieved, any unvested portion of the stock option subject to the First Milestone will fully vest.

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◦In the event the Market Cap Milestone is achieved, any unvested portion of the Milestone Option will fully vest.

◦The date of vesting for the Milestone Option will be the earlier of (i) the date following the Company's filing with the SEC of its Form 10-K for the applicable fiscal year in which the applicable revenue target was attained or, (ii) the date of the Market Cap Milestone is achieved.

◦All shares subject to the Milestone Option will vest immediately upon a change in control.

◦The Milestone Option will remain outstanding unless and until the last possible time that the Second Milestone can be achieved, the Market Cap Milestone can be achieved, or a change in control may occur during the term of the Milestone Option award, subject to the recipient's continued service.

NOTE 15 — Employee Stock Purchase Plan

The 2021 Employee Stock Purchase Plan (the “ESPP”) became effective immediately upon closing of the Merger. Pursuant to the ESPP, 1,126 shares of common stock are initially reserved for issuance. During the term of the ESPP, the number of shares of common stock thereunder automatically increases on each January 1, commencing on January 1, 2023 and ending on (and including) January 1, 2031, by the lesser of (i) 2.5% of the fully diluted shares of common stock as of the last day of the preceding fiscal year and (ii) 1,126 shares (as adjusted pursuant to the terms of the ESPP). The Company's current offering period runs from September 16, 2022 through March 15, 2023. Certain employees have enrolled but no purchases had been made as of September 30, 2022.

NOTE 16 — Related Party Transactions

One of Leafly's significant investors, Brendan Kennedy, is a member of the board of directors of Tilray, Inc., which is the parent company of High Park Holdings Ltd., a customer of Leafly, and has therefore been identified as a related party. During the three months ended September 30, 2022 and 2021, the Company recorded approximately $— and $11, respectively, of revenue earned from contracts with this customer, and during the nine months ended September 30, 2022 and 2021, the Company recorded approximately $— and $125, respectively, of revenue earned from contracts with this customer.

In June 2021, Mr. Kennedy, purchased a convertible promissory note totaling $1,000. The note was issued as part of the existing series of 2021 Notes (see Note 11) and was subject to the same interest rate, maturity, and conversion terms. This note converted to shares of Leafly common stock upon closing of the Business Combination in February 2022, along with the other 2021 Notes.

NOTE 17 – Defined Contribution Plan

The Company recognized expense from matching contributions to the Company-sponsored defined contribution retirement (401k) plan of $225 and $159 for the three months ended September 30, 2022 and 2021, respectively, and $684 and $528 for the nine months ended September 30, 2022 and 2021, respectively.

NOTE 18 — Net Income (Loss) Per Share

Basic and diluted net income (loss) per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. Under the two-class method, basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Shares repurchased and held in treasury by the Company are removed from the weighted-average number of shares of common stock outstanding as of the date of repurchase.

The Company considers its preferred stock to be participating securities. As of September 30, 2022, the Company had 5,429 outstanding shares of common stock that are in escrow and subject to earn-out conditions and thus forfeiture, which do not meet the criteria for participating securities (see Note 12 — Stockholders' Equity for additional information). Net income (loss) is attributed to common stockholders and participating securities based on their participation rights. Net income (loss) is not attributed to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in any losses.

Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of non-participating shares of common stock that are subject to forfeiture, stock options, preferred stock,

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convertible notes, and other securities outstanding. Certain securities are antidilutive and as such, are excluded from the calculation of diluted earnings per share and disclosed separately. Because of the nature of the calculation, particular securities may be dilutive in some periods and anti-dilutive in other periods. The Class 1, 2, and 3 common shares presented below have been retroactively restated for all periods using the conversion ratio in connection with the Business Combination.

The following table presents the computation of basic and diluted net income (loss) per share attributable to common stockholders, as a group, for the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss) (A)	$	15,454	$	(4,454)	$	10,837	$	(6,880)
Income impact of FPAs	(3,939)		—		(346)		—
Income impact of convertible promissory notes	600		—		—		—
Total undistributed income (loss) (B)	12,115		(4,454)		10,491		(6,880)
Weighted average shares outstanding (C)	35,580		24,923		35,260		24,832
Dilutive effect of FPAs	3,547		—		1,140		—
Dilutive effect of convertible promissory notes	2,477		—		—		—
Dilutive effect of stock-based awards	1,611		—		2,304		—
Common stock and common stock equivalents (D)	43,215		24,923		38,704		24,832
Net income (loss) per share:
Basic (A/C)	$	0.43	$	(0.18)	$	0.31	$	(0.28)
Diluted (B/D)	$	0.28	$	(0.18)	$	0.27	$	(0.28)

During 2022, the Class 1, 2, and 3 shares were outstanding from January 1, 2022 through February 3, 2022, while only one class of common stock was outstanding beginning February 4, 2022. During 2021, only the Class 1, 2, and 3 shares were outstanding. Following are the calculations of basic and diluted net income (loss) per share for each class of common stock (refer to the tables above for the impact of common stock equivalents on common shares for the three and nine months ended September 30, 2022):

	Three Months Ended September 30, 2022		Three Months Ended September 30, 2021
	Common		Class 1		Class 2		Class 3
Net income (loss)	$	15,454	$	(1,676)	$	(2,458)	$	(320)
Weighted average shares outstanding	35,580		9,379		13,755		1,789
Common stock and common stock equivalents	43,215		9,379		13,755		1,789
Basic net income (loss) per share	$	0.43	$	(0.18)	$	(0.18)	$	(0.18)
Diluted net income (loss) per share	$	0.28	$	(0.18)	$	(0.18)	$	(0.18)

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	Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021
	Common		Class 1		Class 2		Class 3
Net loss	$	10,837	$	(2,598)	$	(3,811)	$	(471)
Weighted average shares outstanding	35,260		9,379		13,755		1,698
Common stock and common stock equivalents	38,704		9,379		13,755		1,698
Basic net income (loss) per share	$	0.31	$	(0.28)	$	(0.28)	$	(0.28)
Diluted net income (loss) per share	$	0.27	$	(0.28)	$	(0.28)	$	(0.28)

The following shares of common stock subject to certain instruments were excluded from the computation of diluted net income per share attributable to common stockholders for the periods presented as their effect would have been antidilutive (with figures recast using the conversion ratio for the Business Combination, as applicable):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Shares subject to warrants	10,451		—		10,451		—
Shares subject to convertible promissory notes	—		12,240		2,428		12,240
Preferred stock	—		6,141		—		6,141
Escrow Shares	1,625		—		1,625		—
Shares subject to outstanding common stock options and RSUs	1,056		3,785		1,056		3,785
Shares subject to stockholder earn-out rights	5,429		—		5,429		—
	$	18,561	$	22,166	$	20,989	$	22,166

See Note 11 for additional information regarding convertible promissory notes, Note 12 for additional information regarding stockholder earn-out rights, preferred stock, and Escrow Shares, Note 13 for additional information regarding warrants, and Note 14 for additional information regarding stock options and RSUs.

NOTE 19 — Segment Reporting

Segment revenue and gross profit were as follows during the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue:
Retail	$	9,042	$	8,606	$	27,286	$	24,572
Brands	2,739		2,290		7,965		6,387
Total revenue	$	11,781	$	10,896	$	35,251	$	30,959
Gross profit:
Retail	7,979		7,744		24,193		22,339
Brands	2,287		1,891		6,647		5,056
Total gross profit	$	10,266	$	9,635	$	30,840	$	27,395

Assets are not allocated to segments for internal reporting presentations, nor are depreciation and amortization.

Geographic Areas

The Company’s operations are primarily in the U.S. and to a lesser extent, in certain other countries. Refer to Note 9 for revenue classified by major geographic area.

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NOTE 20 — Fair Value Measurements

The Company follows the guidance in ASC 820, "Fair Value Measurement," for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1:    Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:    Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3:    Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

The Company’s financial instruments include cash equivalents, restricted cash, accounts receivable from customers, accounts payable and accrued liabilities, all of which are typically short-term in nature. The Company believes that the carrying amounts of these financial instruments reasonably approximate their fair values due to their short-term nature.

The following table presents information about the Company’s derivative liabilities that are measured at fair value on a recurring basis beginning February 4, 2022 (the date of closing of the Business Combination) when the derivative liabilities were assumed, and discloses the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description	Level	Fair Value at September 30, 2022		Fair Value at June 30, 2022		Fair Value at February 4, 2022		Gain (Loss) Three Months Ended September 30, 20221		Gain (Loss) Nine Months Ended September 30, 20221
Private Warrants derivative liability	3	$	662	$	3,693	$	3,916	$	3,031	$	3,254
Forward share purchase agreements derivative liability 2	3	—		17,763		14,170		3,939		346
Escrow Shares derivative liability	3	47		3,481		6,868		3,434		6,821
Stockholder earn-out rights derivative liability	3	288		12,147		26,131		11,859		25,843
Total		$	997	$	37,084	$	51,085	22,264		$	36,264

1 Totals may not foot due to rounding.

2 The forward share purchase agreements were settled effective August 1, 2022, at which time the fair value was $13,824 based on cash settlement.

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Assumptions used to determine the fair values are presented in the following sections:

Private Warrants Derivative Liability

The Private Warrants were valued using a Black-Scholes model and the following Level 3 inputs:

	September 30, 2022		June 30, 2022		February 4, 2022
Exercise price	$	11.50	$	11.50	$	11.50
Stock price	$	0.68	$	4.50	$	6.53
Volatility	98.0%		51.6%		34.3%
Term (in years)	4.34		4.59		5.00
Risk-free rate	4.1%		3.0%		1.8%
Dividend yield	0.0%		0.0%		0.0%

The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies and the volatility of the Public Warrants. The term input represents the maximum contractual term, though the Private Warrants may be exercised earlier. The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

Forward Share Purchase Agreements Derivative Liability

The FPAs were valued using a Black-Scholes model and the following Level 3 inputs:

	September 30, 2022	June 30, 2022		February 4, 2022
Exercise price - one agreement	N/A	$	10.31	$	10.16
Exercise price - three agreements	N/A	$	10.16	$	10.01
Stock price	N/A	$	4.50	$	6.53
Volatility	N/A	70.4%		63.9%
Term (in years)	N/A	0.09		0.24
Risk-free rate	N/A	1.3%		0.2%
Dividend yield	N/A	0.0%		0.0%

The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies. The term input represents the maximum contractual term, though the shares underlying the FPAs may be sold by the holders into the open market earlier, which in some cases they have been (see Note 13). The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

Escrow Shares Derivative Liability

The Escrow Shares derivative liability was calculated using a binomial lattice model and the following Level 3 inputs:

	September 30, 2022		June 30, 2022		February 4, 2022
First stock price trigger	$	13.50	$	13.50	$	13.50
Second stock price trigger	$	15.50	$	15.50	$	15.50
Stock price	$	0.68	$	4.50	$	6.53
Volatility	79.0%		68.0%		64.0%
Term (in years)	2.34		2.59		3.00
Risk-free rate	4.2%		3.0%		1.6%
Dividend yield	0.0%		0.0%		0.0%

The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies. The term input represents the maximum contractual term, though the shares may be released from escrow earlier. The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

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Stockholder Earn-Out Rights Derivative Liability

The stockholder earn-out rights were valued using a binomial lattice model and the following Level 3 inputs:

	September 30, 2022		June 30, 2022		February 4, 2022
First stock price trigger	$	13.50	$	13.50	$	13.50
Second stock price trigger	$	15.50	$	15.50	$	15.50
First revenue trigger	$	65,000	$	65,000	$	65,000
Second revenue trigger	$	101,000	$	101,000	$	101,000
Stock price	$	0.68	$	4.50	$	6.53
2022 Revenue assumption	$	47,500	$	49,500	$	55,500
Volatility	79.0%		68.0%		64.0%
Term (in years)	2.34		2.59		3.00
Risk-free rate	4.2%		3.0%		1.6%
Dividend yield	0.0%		0.0%		0.0%

The revenue assumption input represents the midpoint of revenue guidance the Company had provided in the respective period. The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies. The term input represents the maximum contractual term, though the stockholder earn-out rights may vest earlier. The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

NOTE 21 - Subsequent Events

Issuance of Restricted Stock Units

On October 6, 2022, the Company awarded 512,203 restricted stock units to employees and members of its board of directors, and 819,721 performance stock units to employees.

Restructuring Plan

On October 18, 2022, the Company committed to a restructuring plan (the “Restructuring Plan”), which is intended to support its strategic plan in an effort to improve operating performance and ensure that the Company is appropriately structured and resourced to deliver sustainable value to its customers and shareholders. Key activities under the Restructuring Plan include a focus on efficiency and cost-saving efforts, which includes decreasing, through attrition and layoffs, total headcount by approximately 56 employees upon the completion of the Restructuring Plan. These activities are expected to be substantially completed by the end of 2022.

The Company currently estimates it will incur cash pre-tax restructuring charges of approximately $500, primarily in the fourth quarter of 2022, as a result of the Restructuring Plan, comprised primarily of one-time severance and other employee-related termination benefits. Estimated amounts are subject to change until finalized.

Nasdaq Notifications of Noncompliance

On October 28, 2022, the Company received a letter from the staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) providing notification that the Company no longer complies with the $50 million in market value of listed securities standard for continued listing on the Nasdaq Global Market under Nasdaq’s Listing Rule 5450(b)(2)(A) and that the Company also does not comply with either of the two alternative standards of Listing Rule 5450(b), the equity standard and the total assets and total revenue standard. On November 2, 2022, Leafly received another letter from the Nasdaq staff providing notification that, for the previous 30 consecutive business days, the bid price for Leafly’s common stock had closed below the $1.00 per share minimum bid price requirement for continued listing under Nasdaq Listing Rule 5450(a)(1). The notices have no immediate effect on the listing of the Company’s common stock or warrants, and its common stock and warrants will continue to trade on The Nasdaq Global Market under the symbol “LFLY” and “LFLYW,” respectively.

The notification of noncompliance has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Global Market. In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has been provided an

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initial period of 180 calendar days, or until April 26, 2023, to regain compliance with the minimum bid price requirement. To regain compliance, the market value of the Company’s common stock must be $50 million or more for a minimum of 10 consecutive business days at any time before April 26, 2023 and we must otherwise satisfy the Nasdaq Global Market’s requirements for continued listing. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided an initial period of 180 calendar days, or until May 1, 2023, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company’s common stock must be $1.00 per share or more for a minimum of 10 consecutive business days at any time before May 1, 2023 and we must otherwise satisfy the Nasdaq Global Market’s requirements for continued listing The Company's failure to regain compliance during this period could result in delisting.

If the Company is not able to achieve compliance with an applicable listing standard under Listing Rule 5450(b) prior to April 26, 2023, the Company may be eligible to transfer the listing for its common stock to the Nasdaq Capital Market. To qualify, the Company would be required to meet the continued listing requirements for the Nasdaq Capital Market.

If the Company does not regain compliance with the minimum bid price requirement by May 1, 2023, the Company may be eligible for an additional 180 calendar day compliance period. To qualify, the Company would need to transfer the listing of its common stock to the Nasdaq Capital Market, provided that it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum bid price requirement, and would need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. However, if it appears to the Staff that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, Nasdaq would notify the Company that its securities would be subject to delisting. In the event of such a notification, the Company may appeal the Staff’s determination to delist its securities, but there can be no assurance the Staff would grant the Company’s request for continued listing.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis (“MD&A”) should be read in conjunction with the condensed consolidated financial statements and related notes. The MD&A is intended to assist in understanding our financial condition and results of operations. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated due to various factors discussed under “Risk Factors” in our Annual Report on Form 10-K and “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q.

Amounts in this section are presented in thousands, except for per share numbers and percentages.

Merger with Merida

On February 4, 2022, Leafly consummated the Business Combination pursuant to the Merger Agreement and became a public company. While the legal acquirer in the Business Combination was Merida, for financial accounting and reporting purposes under U.S. GAAP, Leafly is the accounting acquirer with the Business Combination accounted for as a “reverse recapitalization.” A reverse recapitalization does not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of the financial statements of Leafly. Under this method, Merida is treated as the “acquired” company and Leafly is the accounting acquirer with the transaction treated as a recapitalization of Leafly.

Accordingly, the consolidated assets, liabilities, and results of operations of Leafly became the historical financial statements, with Merida’s assets, liabilities and results of operations consolidated with Leafly’s beginning on the Business Combination date. Except for certain derivative liabilities (which were measured at fair value), the assets and liabilities of Merida were recognized at historical cost (which is consistent with carrying value) and were not material, with no goodwill or other intangible assets recorded. Operations prior to the closing of the Business Combination presented for comparative purposes below are those of Leafly.

Business Overview

Leafly is a leading online cannabis discovery marketplace and resource for cannabis consumers. Leafly provides an information resource platform with a deep library of content, including detailed information about cannabis strains, retailers and current events. We are a trusted destination to discover legal cannabis products and order them from licensed retailers with offerings that include subscription-based products and digital advertising. Leafly was founded in 2010 and is headquartered in Seattle with 259 employees as of September 30, 2022.

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Leafly is one of the cannabis industry’s leading marketplaces for brands and retailers to reach one of the largest audiences of consumers interested in cannabis. Our platform includes educational information, strains data, and news, enabling consumers to use Leafly’s content library to have an informed shopping experience. Leafly reduces the friction caused by fragmented regulation of cannabis across North America and offers a compliant digital marketplace that connects cannabis consumers with legal and licensed retailers and brands nearest them.

Leafly allows each shopper to tailor their journey, selecting the store, brand, and cannabis form-factor that appeals to them. Once that shopper builds a basket and is ready to order, our non-plant-touching business model sends that order reservation to the store for payment and fulfillment. By matching stores and shoppers, we deliver value to all constituencies. We monetize our platform primarily through the sale of subscription packages, bundling e-commerce software and advertising solutions, as well as non-subscription-based advertising to retailers and brands. Through the participation on our platform, retailers and brands can reach and engage the millions of average monthly active users ("MAUs") on our platform, one of the largest cannabis-focused audiences in the world.

During the second quarter and continuing into the third quarter, we began to see some macro-economic impacts on the business. Our retailer, brands, and multi state operator customers signaled that their advertising budgets are under scrutiny and, in some cases, froze their advertising spend. In addition, we saw a continuation of customer account churn in our less mature markets, which we first observed late in the first quarter. In light of the current macroeconomic environment, we are taking a more conservative view of the final quarter of the year and are taking steps to manage the business accordingly. We have implemented plans to reduce operating expenses, including an announced headcount reduction of 56 employees or approximately 21% of our workforce. We expect to incur non-recurring cash charges of approximately $500 associated with the headcount reductions during the fourth quarter of 2022. We anticipate these and other changes in our cost structure in 2022 will save approximately $16,000 in cash costs annually once all of the restructuring and other cost savings initiatives are fully implemented. These cost reductions are not expected to have a significant impact on the scope of our business. We will focus on maximizing efficiencies across all areas, investing in projects and products that we expect will result in the highest returns.

Merger and Public Company Costs

As a consequence of the Business Combination, Leafly became the successor to an SEC-registered and Nasdaq-listed company which requires Leafly to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. Leafly has incurred, and expects to continue to incur, additional expenses as a public company for, among other things: additional directors’ and officers’ liability insurance; compensation for directors and additional internal and external accounting, legal, and administrative resources, including increased audit and legal fees; and costs of certain related software tools.

Direct costs of the Business Combination and resulting recapitalization have been recorded to additional paid-in capital and other expense, as appropriate (see Note 2 to our condensed consolidated financial statements within this Quarterly Report), while general costs associated with becoming and operating as a public company have been expensed throughout operating expenses within our Consolidated Statements of Operations, as applicable, primarily to general and administrative. We currently anticipate we will incur approximately $8,500 to $9,500 annually in incremental cash costs of operating as a public company. This estimate does not reflect general increases in costs due to growing our business. Non-cash stock-based compensation expenses may also increase significantly as we transition to operating as a public company, leveraging our available equity, including derivatives thereof, to fund operations. These estimates and expectations may change as we begin to experience these new conditions.

Key Metrics

In addition to the measures presented in our condensed consolidated financial statements, our management regularly monitors certain metrics in the operation of our business:

Monthly active users

Monthly active users (“MAUs”) represents the total unique visitors to Leafly websites and native apps each month, which in turn represents the maximum potential unique visitors that could become a customer of a dispensary or brand listed on Leafly’s platform, within a given month. Leafly’s revenue model for dispensaries and brands is based, in part, on the number of visitors it can drive to dispensary or brand listings on the platform. Providing more visitors, as represented by MAUs, may lead to increased advertising rates for both dispensaries and brands.

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Users (visitors) are considered active by initiating a session on at least one webpage or app. Each month’s MAUs is the total of unique visitors to Leafly during the specified month and includes both new visitors as well as those returning from the previous month. We count a unique user the first time an individual accesses one of our websites or native apps during a calendar month. If an individual accesses our websites using different web browsers within a given month, the first access by each such web browser is counted as a separate unique user. If an individual accesses more than one of our websites or native apps in a single month, the first access to each website or app is counted as a separate unique user since unique users are tracked separately for each domain and native app. The unique visitors are measured using Google Analytics for our web applications and Firebase for our native applications.

Due to third-party technological limitations, user software settings, or user behavior, Google Analytics may assign a unique cookie to different instances of access by the same individual to our websites. In such instances, Google Analytics would count different instances of access by the same individual as separate unique users. Accordingly, reliance on the number of unique users counted by Google Analytics may overstate the actual number of unique users who access our websites during the period. Additionally, we cannot differentiate between a user who accesses Leafly across both the web and a native app, which could overstate the number of unique users.

A growing number of MAUs is indicative of our overall product health as it is the result of metrics reflecting both retention and acquisition of customers of our suppliers. While we consider MAUs to be a leading indicator of general product health representing the blend of new customer acquisition and the retention of returning customers, we also acknowledge that this must be paired with a deeper analysis of MAU behavioral metrics. We measure the quality of experience by looking at MAU cohorts engagement behaviors as measured by time on site, interaction with personalization features such as favoriting and following, and orders placed.

Ending retail accounts

Ending retail accounts is the number of paying retailer accounts with Leafly as of the last month of the respective period. Retail accounts can include more than one retailer. This metric is helpful because it represents a portion of the volume element of our revenue and provides an indication of our market share.

Retailer average revenue per account

Retailer ARPA is calculated as monthly retail revenue, on an account basis, divided by the number of retail accounts that were active during that same month. An active account is one that had an active paying subscription with Leafly in the month. Leafly does not provide retailers with an ongoing free subscription offering but may offer a free introductory period with certain subscriptions. This metric is helpful because it represents the price element of our revenue.

The tables below presents these measures for the respective periods:

Three Months Ended September 30,	2022		2021		Change		Change (%)
Average Monthly Active Users ("MAUs") (in thousands)1	8,187		9,433		(1,246)		(13)	%
Ending retail accounts2	5,637		4,769		868		18	%
Retailer average revenue per account ("ARPA")3	$	556	$	621	$	(65)	(10)	%

1 Calculated as a simple average for the period presented. Using the prior calculation that excluded native apps, Average MAUs would have been 7,510 and 8,754 for the three months ended September 30, 2022 and 2021, respectively, for a decrease of 1,244, or 14%.

2 Represents the amount outstanding in the last month of the respective period.

3 Calculated as a simple average of monthly retailer ARPA for the period presented. Using the prior calculation of retailer ARPA which included retail revenue on a product basis, retailer ARPA would have been $551 and $619 for the three months ended September 30, 2022 and 2021, respectively, for a decrease of $68 or 11%.

Nine Months Ended September 30,	2022		2021		Change		Change (%)
Average Monthly Active Users ("MAUs") (in thousands)1	7,940		10,451		(2,511)		(24)	%
Ending retail accounts2	5,637		4,769		868		18	%
Retailer average revenue per account ("ARPA")3	$	570	$	649	$	(79)	(12)	%

1 Calculated as a simple average for the period presented. Using the prior calculation that excluded native apps, Average MAUs would have been 7,266 and 9,700 for the nine months ended September 30, 2022 and 2021, respectively, for a decrease of 2,434, or 25%.

2 Represents the amount outstanding in the last month of the respective period.

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3 Calculated as a simple average of monthly retailer ARPA for the period presented. Using the prior calculation of retailer ARPA which included retail revenue on a product basis, retailer ARPA would have been $567 and $645 for the nine months ended September 30, 2022 and 2021, respectively for a decrease of $78 or 12%.

MAUs decreased 13% and 24% for the three and nine months ended September 30, 2022 compared to the same periods in 2021 due to people not shopping online at the same pace as they did during the pandemic, along with a decline in organic search traffic (in particular, our news and learn sections). The 13% decline for the three months ended September 30, 2022 represents a slowing rate of decline in Average MAUs and shows a sequential improvement over the decline witnessed in the second quarter of this year. The Company continues to focus primarily on growing the number of supply partners on the platform, leading to an 18% growth in year over year ending retail accounts. Part of this growth in retail accounts included expanding into lower penetration markets at a lower price point, a strategic decision which contributed to a 10% and 12% decline in ARPA for the three and nine months ended September 30, 2022, respectively.

Discussion of our Results of Operations 

Revenue

Three Months Ended September 30,	2022		2021		Change ($)		Change (%)
Retail	$	9,042	$	8,606	$	436	5	%
Brands	2,739		2,290		449		20	%
Total revenue	$	11,781	$	10,896	$	885	8	%

Nine Months Ended September 30,	2022		2021		Change ($)		Change (%)
Retail	$	27,286	$	24,572	$	2,714	11	%
Brands	7,965		6,387		1,578		25	%
Total revenue	$	35,251	$	30,959	$	4,292	14	%

Retail

Retail revenue from digital media display ads from licensed dispensaries increased $424 and subscriptions revenue decreased $20 for the three months ended September 30, 2022 and increased $1,873 and $757, respectively, for the nine months ended September 30, 2022. Digital media display ads revenue growth was driven by increased volumes of display ads sold. The subscriptions revenue decline in the current quarter was driven by lower prices, reflecting turnover among accounts with higher ARPA combined with the acquisition of accounts with lower ARPA. For the nine-month period ended September 30, 2022, the increase in retail subscription revenue was driven by higher volume, reflected in an 18% increase in the number of ending retail accounts, offset in part by the price dynamics just discussed.

The Company's continued focus on adding ending retail accounts, with a reduction in prices in target markets, reflects a strategic decision to attract a greater number of local retailers onto our platform. In 2022, we continued use of a regional pricing model based on traffic and orders, which had the effect of decreasing overall prices within our mix of revenue during 2022 when compared to 2021, as reflected in a 10% and 12% decrease in ARPA for the three and nine months ended September 30, 2022, respectively.

Brands

For the three months ended September 30, 2022, Brands revenue increased due primarily to:

•direct-to-consumer marketing revenue increase of $193;

•digital media display ads (including audience extension services) revenue increase of $99;

•subscriptions revenue increase of $78; and

•revenue of $49 from newly offered licensing of data for use in brands advertising.

For the nine months ended September 30, 2022, Brands revenue increased due primarily to:

•direct-to-consumer marketing revenue increase of $510;

•subscriptions revenue increase of $286;

•digital media display ads (including audience extension services) revenue increase of $304; and

•revenue of $333 from newly offered licensing of data for use in brands advertising.

The Company’s current systems do not allow us to precisely quantify changes in Brands revenue attributable to price and volume. We continue to implement systems and processes that will allow us to do so. In the meantime, the information we

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have from our existing systems, combined with our knowledge of changes in list prices, informs the discussion of Brands volume and pricing that follows. We believe Brands revenue grew primarily due to increased volume. We offer a solution for brands that continue to lack access to their target audience through certain traditional advertising channels that do not work with the cannabis industry, and as CBD and related cannabis-adjacent brands want to advertise to our audience.

Cost of revenue

Three Months Ended September 30,	2022		2021		Change ($)		Change (%)
Retail	$	1,063	$	862	$	201	23	%
Brands	452		399		53		13	%
Total cost of revenue	$	1,515	$	1,261	$	254	20	%

Nine Months Ended September 30,	2022		2021		Change ($)		Change (%)
Retail	$	3,093	$	2,233	$	860	39	%
Brands	1,318		1,331		(13)		(1)	%
Total cost of revenue	$	4,411	$	3,564	$	847	24	%

Retail

Retail cost of revenue increased due primarily to a $74 and $479 increase in business platform costs, primarily data licensing fees, for the three and nine months ended September 30, 2022, respectively, and due to $47 and $170 higher website infrastructure costs, primarily hosting fees, respectively. Retail cost of revenue also increased $79 and $200 for the three and nine months ended September 30, 2022, respectively, due to increased headcount costs, generally.

Brands

Brands cost of revenue increased across nearly all components when comparing the three months ended September 30, 2022 to the prior year. Partially offsetting these increases was a decrease of $55 in costs of audience extension services, corresponding to decreased associated revenue.

Brands cost of revenue decreased for the nine months ended September 30, 2022, primarily reflecting a decrease of $346 in costs of audience extension, corresponding to decreased associated revenue. Partially offsetting this decrease were $147 higher business platform costs and $68 higher website infrastructure costs, as described under Retail cost of revenue above, as these costs are shared across both of our segments. Brands cost of revenue also increased $86 for the nine months ended September 30, 2022, due to increased headcount costs, generally.

Operating expenses

Three Months Ended September 30,	2022		2021		Change ($)		Change (%)
Sales and marketing	$	6,403	$	4,999	$	1,404	28	%
Product development	3,406		3,522		(116)		(3)	%
General and administrative	6,489		4,949		1,540		31	%
Total operating expenses	$	16,298	$	13,470	$	2,828	21	%

Nine Months Ended September 30,	2022		2021		Change ($)		Change (%)
Sales and marketing	$	21,529	$	13,148	$	8,381	64	%
Product development	10,927		9,905		1,022		10	%
General and administrative	20,730		10,485		10,245		98	%
Total operating expenses	$	53,186	$	33,538	$	19,648	59	%

Sales and marketing expenses grew as we made additional investments in this area of our business following increased funding through the issuance of the 2022 Notes, with cost temperament beginning in the third quarter as we began to implement the cost reduction activities described under "- Business Overview" above. We (decreased) increased advertising and marketing spending by $(508) and $1,848 and employee compensation costs by $1,734 and $5,652, when comparing

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the three and nine months ended September 30, 2022, respectively, to the same periods in 2021. We increased our number of sales and marketing staff by approximately 75% and 50%, respectively, when comparing these periods.

Product development expenses behaved similarly to sales and marketing expenses, growing with additional funding and beginning to slow as we implemented cost reduction activities. Professional services fees included within product development grew $258 and $1,064 for the three and nine months ended September 30, 2022, respectively, largely related to the use of outsourced providers for staff augmentation. Also within product development are increases in headcount costs generally offset by capitalized product development costs in 2022. Headcount costs prior to capitalization increased approximately $311 and $1,825 for the three and nine months ended September 30, 2022, respectively. Product development expenses are reported net of $755 and $2,081 of costs capitalized to internal-use software for the three and nine months ended September 30, 2022, respectively. No amounts were capitalized in 2021. See Note 6 to our condensed consolidated financial statements within this Quarterly Report for more information.

General and administrative expenses increased for the three and nine months ended September 30, 2022, respectively, due primarily to:

•a $1,385 and $3,848 increase in insurance costs, primarily related to directors and officers insurance for post-Business Combination coverage;

•a $275 and $3,079 increase in compensation, including $426 and $2,359 of stock-based compensation expenses, primarily associated with the modification of certain options held by our CEO, the hiring of several senior-level employees during the fourth quarter of 2021, and higher rates of salaries, stock-based compensation, and related benefits and bonuses in general; and

•a $(536) decrease and a $1,751 increase in professional services fees, largely related to the Business Combination and becoming a public company, offset by decreased recruiting fees as we generally moved these activities in-house and reduced our hiring during the third quarter of 2022; and

•a $264 and $732 increase in costs of software.

Other income and expense

Three Months Ended September 30,	2022		2021		Change ($)		Change (%) 1
Interest expense, net	$	(705)	$	(590)	$	(115)	19	%
Change in fair value of derivatives	22,264		—		22,264		nm
Other expense, net	(73)		(29)		(44)		nm
Total other income (expense)	$	21,486	$	(619)	$	22,105	nm

1 An "nm" reference means the percentage is not meaningful.

Nine Months Ended September 30,	2022		2021		Change ($)		Change (%) 1
Interest expense, net	$	(2,119)	$	(698)	$	(1,421)	204	%
Change in fair value of derivatives	36,264		—		36,264		nm
Other expense, net	(962)		(39)		(923)		nm
Total other income (expense)	$	33,183	$	(737)	$	33,920	nm

1 An "nm" reference means the percentage is not meaningful.

Interest expense, net increased due to higher principal balances of convertible promissory notes outstanding, on average, for the three and nine months ended September 30, 2022, respectively, when compared to the same periods in 2021.

The change in fair value of derivatives is due to the recording of derivatives in connection with the Business Combination and changes in their valuations. See Note 20 to our condensed consolidated financial statements within this Quarterly Report for details on the valuations and the fair value changes in the periods presented.

Other expense, net increased for the nine months ended September 30, 2022 due primarily to $874 of costs incurred in connection with the Business Combination, which were allocated upon closing of the Business Combination to newly issued derivative liabilities that are recorded at fair value on a recurring basis. See Note 2 to our condensed consolidated financial statements within this Quarterly Report for information on allocation of these costs.

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Non-GAAP Financial Measures

Earnings Before Interest, Taxes and Depreciation and Amortization (EBITDA) and Adjusted EBITDA

To provide investors with additional information regarding our financial results, we have disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that we calculate as net income (loss) before interest, taxes and depreciation and amortization expense in the case of EBITDA and further adjusted to exclude non-cash, unusual and/or infrequent costs in the case of Adjusted EBITDA. Below we have provided a reconciliation of net income (loss) (the most directly comparable GAAP financial measure) to EBITDA and from EBITDA to Adjusted EBITDA.

We present EBITDA and Adjusted EBITDA because these metrics are a key measure used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions regarding the allocation of investment capacity. Accordingly, we believe that EBITDA and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.

EBITDA and Adjusted EBITDA have limitations as an analytical tool, and you should not consider these in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:

•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and both EBITDA and Adjusted EBITDA do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

•EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and

•EBITDA and Adjusted EBITDA do not reflect interest or tax payments that may represent a reduction in cash available to us.

Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net income (loss) and our other GAAP results.

A reconciliation of net income (loss) to non-GAAP EBITDA and Adjusted EBITDA follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss)	$	15,454	$	(4,454)	$	10,837	$	(6,880)
Interest expense, net	705		590		2,119		698
Depreciation and amortization expense	127		57		276		195
EBITDA	16,286		(3,807)		13,232		(5,987)
Stock-based compensation	771		208		3,159		729
Transaction expenses allocated to derivatives	—		—		874		—
Change in fair value of derivatives	(22,264)		—		(36,264)		—
Adjusted EBITDA	$	(5,207)	$	(3,599)	$	(18,999)	$	(5,258)

The increase in EBITDA is due to the change in fair value of the derivatives for the three and nine months ended September 30, 2022. See Note 20 to our condensed consolidated financial statements within this Quarterly Report for more information regarding the fair value of derivatives. The increase in our loss on an Adjusted EBITDA basis is due to increased operating expenses offset in part by increased revenue. See discussion of these changes under the respective headings above.

Financial Condition

Cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash totaled $28,436 and $28,695 as of September 30, 2022 and December 31, 2021, respectively. Explanations of our cash flows for the periods presented follow.

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Cash flows

As compared to the nine months ended September 30, 2021, cash used in operations increased by $22,029 to $25,130 for the nine-month period ended September 30, 2022, mainly due to increased net loss from operations. See discussion under “— Discussion of our Results of Operations” above for more information. Cash used in investing activities increased $2,156 to a use of $2,194 due to additional investments in property and equipment in the current year. Cash and restricted cash provided by financing decreased $4,386 over this same period to $27,065 for the nine months ended September 30, 2022, mainly due to the use of financing proceeds received earlier in the year to repurchase common stock in settlement of FPAs in the third quarter of 2022. See Notes 3, 11, and 13 to our condensed consolidated financial statements within this Quarterly Report for more information.

Stock and convertible promissory note issuances

Since our capital restructuring in 2019, we have financed a sizable portion of our operations from issuances of stock and convertible promissory notes. The proceeds of these issuances have been used to fund, among other things, working capital and capital expenditures. See more information about our stock in Note 12 and our convertible notes in Note 11 to our condensed consolidated financial statements within this Quarterly Report.

Deferred revenue

Deferred revenue is primarily related to software subscriptions and display ads. The revenue deferred at September 30, 2022 is expected to be recognized in the subsequent 12-month period. See Note 9 to our condensed consolidated financial statements within this Quarterly Report for further discussion.

Contractual obligations and other planned uses of capital

We are obligated to repay any convertible notes that do not ultimately convert to equity, as well as the other operating liabilities on our Consolidated Balance Sheets, such as accrued liabilities. We intend to continue to invest in product and feature development, expanding our marketing and sales operations, improving and expanding our technology and finance infrastructure, hiring additional and retaining existing employees, pursuing strategic opportunities, and meeting the increased compliance requirements associated with our transition to and operation as a public company. In addition, we intend to add back in-person working space over time. As we continue to grow, we expect the aggregate amount of these expenses will also continue to grow.

Liquidity

Leafly has incurred losses since its inception and had an accumulated deficit of $58,933 and $69,770 at September 30, 2022 and December 31, 2021, respectively.

Upon the closing of the Business Combination, Leafly issued the 2022 Notes, which provided incremental funding for our operations. Note 11 to our condensed consolidated financial statements within this Quarterly Report provides additional information regarding the 2022 Notes. As discussed in Note 21 and under “— Business Overview” above, the Company announced a restructuring plan on October 18, 2022, which along with other cost cutting measures, the Company estimates will reduce annual operating costs by approximately $16,000.

We believe that our capital resources are sufficient to fund our operations for at least the following 12 months.

Related Party Relationships

See Note 16 to our condensed consolidated financial statements within this Quarterly Report for information on the Company's related party relationships and transactions.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Leafly is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information otherwise required with respect to market risk.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The term “disclosure controls and procedures,” as defined in Rules 13a-15 and 15d-15 under the Exchange Act refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports

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that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Because there are inherent limitations in all control systems, a control system, no matter how well conceived and operated, can provide only reasonable, as opposed to absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, as of the end of the period covered by this Quarterly Report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(d) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the three months ended September 30, 2022.

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Part II - Other Information

Item 1. LEGAL PROCEEDINGS

We are involved in legal and administrative proceedings and litigation arising in the ordinary course of business. We believe that the potential liability, if any, in excess of amounts already accrued from all proceedings, claims and litigation will not have a material effect on our financial position, cash flows or results of operations when resolved in a future period. There have been no material developments to the legal proceedings reported in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 1A. RISK FACTORS

Other than the items discussed below, there have been no material changes to the Risk Factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021:

Our shares of common stock are listed on Nasdaq, but we cannot guarantee that we will be able to satisfy the continued listing standards going forward.

The Nasdaq Stock Market LLC (“Nasdaq”) requires listed companies to comply with certain standards in order to remain listed. On October 28, 2022, Leafly received a letter from the Nasdaq staff providing notification that, for the previous 30 consecutive business days, the minimum market value of Leafly’s listed securities had closed below the $50 million minimum market value requirement for continued listing under Nasdaq Listing Rule 5450(b)(2)(A). This letter notified the Company that it also does not comply with either of the two alternative standards of Listing Rule 5450(b), the equity standard and the total assets and total revenue standard. On November 2, 2022, Leafly received another letter from the Nasdaq staff providing notification that, for the previous 30 consecutive business days, the bid price for Leafly’s common stock had closed below the $1.00 per share minimum bid price requirement for continued listing under Nasdaq Listing Rule 5450(a)(1). The notices have no immediate effect on the listing of the Company’s common stock, and its common stock and warrants have continued to trade on the Nasdaq Global Market under the symbols “LFLY” and “LFLYW,” respectively.

In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has been provided an initial period of 180 calendar days, or until April 26, 2023, to regain compliance with the minimum bid price requirement. To regain compliance, the market value of the Company’s common stock must be $50 million or more for a minimum of 10 consecutive business days at any time before April 26, 2023 and we must otherwise satisfy the Nasdaq Global Market’s requirements for continued listing. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided an initial period of 180 calendar days, or until May 1, 2023, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company’s common stock must be $1.00 per share or more for a minimum of 10 consecutive business days at any time before May 1, 2023 and we must otherwise satisfy the Nasdaq Global Market’s requirements for continued listing.

If the Company does not regain compliance with the minimum market value price requirement by April 26, 2023 the Company may be eligible to transfer the listing for its common stock to the Nasdaq Capital Market. To qualify, the Company would be required to meet the continued listing requirements for the Nasdaq Capital Market.

If the Company does not regain compliance with the minimum bid price requirement by May 1, 2023, the Company may be eligible for an additional 180 calendar day compliance period, provided that the Company meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum bid price requirement, and would need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. However, if it appears to Nasdaq’s staff that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, Nasdaq would notify the Company that its securities would be subject to delisting. In the event of such a notification, the Company may appeal the staff’s determination to delist its securities, but there can be no assurance the staff would grant the Company’s request for continued listing.

The Company intends to actively monitor the bid price of its common stock and its market value of listed securities, and will consider options available to it to regain compliance with the Nasdaq listing rules. There can be no assurance that the Company will be able to regain compliance with the minimum bid price requirement or will otherwise be in compliance with the other listing standards for The Nasdaq Capital Market.

Delisting from the Nasdaq Global Market or any Nasdaq market could make trading our common stock more difficult for investors, potentially leading to declines in our share price and liquidity. In addition, without a Nasdaq market listing, stockholders may have a difficult time getting a quote for the sale or purchase of our stock, the sale or purchase of our

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stock would likely be made more difficult and the trading volume and liquidity of our stock could decline. Delisting from Nasdaq could also result in negative publicity and make it more difficult for us to raise additional capital. The absence of such a listing may adversely affect the acceptance of our common stock as currency or the value accorded by other parties. Further, if we are delisted, we would also incur additional costs under state blue sky laws in connection with any sales of our securities. These requirements could severely limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock in the secondary market. We cannot assure you that our common stock, if delisted from Nasdaq, will be listed on another national securities exchange or quoted on an over-the counter quotation system. If our common stock is delisted, it may come within the definition of “penny stock” as defined in the Exchange Act and would be covered by Rule 15g-9 of the Exchange Act. That Rule imposes additional sales practice requirements on broker-dealers who sell securities to persons other than established customers and accredited investors.

If we are unable to execute cost-cutting measures successfully, our total operating costs may be greater than expected, which would adversely affect our profitability.

We have implemented plans to reduce operating expenses, including an announced headcount reduction of 56 employees or approximately 21% of our workforce. If we do not achieve expected savings, or our operating costs increase as a result of investments in strategic initiatives, our total operating costs would be greater than anticipated. In addition, if we do not manage our costs properly, such efforts may affect the quality of our products and features and our ability to generate future revenues. Reductions in staff could also adversely affect our ability to attract and retain key employees.

Item 2. UNREGISTERED SALES OF INVESTMENT SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table presents the number and average price of shares purchased in each fiscal month of the third quarter of 2022:

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program	Dollar Value of Shares that May Yet Be Purchased Under the Program
July 1 through 31, 2022	—	$	—	—	$	—
August 1 through 31, 2022	3,081,086	$	10.28	—	$	—
September 1 through 30, 2022	—	$	—	—	$	—
	3,081,086	$	10.28	—	$	—

All of the shares in the table above were repurchased in settlement of the Company's forward share purchase agreements. Please see Note 13 to our condensed consolidated financial statements within this Quarterly Report for more information.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

None.

38

Item 6. EXHIBITS

The following documents are included as exhibits to this Quarterly Report on Form 10-Q:

Exhibit Number		Exhibit Description
2.1		Agreement and Plan of Merger, dated as of August 9, 2021, by and among Leafly Holdings, Inc., Merida Merger Corp. I, Merida Merger Sub, Inc. and Merida Merger Sub II, LLC (incorporated by reference to Exhibit 2.1 to the Company's Form S-1 filed with the SEC on May 5, 2022).
2.2		First Amendment to the Agreement and Plan of Merger, dated as of September 8, 2021, by and among Leafly Holdings, Inc., Merida Merger Corp. I, Merida Merger Sub, Inc. and Merida Merger Sub II, LLC (incorporated by reference to Exhibit 2.2 to the Company's Form S-1 filed with the SEC on May 5, 2022).
2.3		Second Amendment to the Agreement and Plan of Merger, dated as of January 11, 2021, by and among Leafly Holdings, Inc., Merida Merger Corp. I, Merida Merger Sub, Inc. and Merida Merger Sub II, LLC (incorporated by reference to Exhibit 2.3 to the Company's Form S-1 filed with the SEC on May 5, 2022).
3.1		Second Amended and Restated Certificate of Incorporation of Leafly Holdings, Inc., dated February 4, 2022 (incorporated by reference to Exhibit 3.1 to the Company's Form 10-K filed with the SEC on March 31, 2022).
3.2		Amended and Restated By-Laws of Leafly Holdings, Inc., dated February 4, 2022 (incorporated by reference to Exhibit 3.2 to the Company's Form 8-K filed with the SEC on February 10, 2022).
10.1*		Form of Performance Stock Unit Award Agreement, Leafly Holdings, Inc. 2021 Equity Incentive Plan
10.2*		Separation Agreement and General Release between Leafly Holdings, Inc. and Kimberly Boler, dated September 9, 2022
31.1*		Certification of Chief Executive Officer of Leafly pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Chief Financial Officer of Leafly pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32*		Certifications of Chief Executive Officer and Chief Financial Officer of Leafly pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	***	Inline XBRL Instance Document
101.SCH	****	Inline XBRL Taxonomy Extension Schema Document
101.CAL	****	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	****	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	****	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	****	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	***	Cover Page Interactive Data File

*	Filed herewith.
**	Furnished herewith.
***	The XBRL Instance Document and Cover Page Interactive Data File do not appear in the Interactive Data File because their XBRL tags are embedded within the Inline XBRL document.
****	Submitted electronically herewith
+	Management contract or compensation plan or arrangement.

SIGNATURES

Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 14, 2022.

39

/s/   Yoko Miyashita                           

By: Yoko Miyashita

Chief Executive Officer

Leafly Holdings, Inc.

/s/  Suresh Krishnaswamy                   

By: Suresh Krishnaswamy

Chief Financial Officer

Leafly Holdings, Inc.

40

EX-10.1

Form Employee PSU Award Agreement -WA

Leafly Holdings, Inc.2021 Equity Incentive Plan

Performance Stock Unit Award Agreement

This Performance Stock Unit Award Agreement (this “Agreement”) is made by and between Leafly Holdings, Inc., a corporation organized and existing under the laws of Delaware (the “Company”) and [●] (the “Participant”), effective as of [-] (the “Date of Grant”).

RECITALS

WHEREAS, the Company has adopted the Leafly Holdings, Inc. 2021 Equity Incentive Plan (as may be further amended, amended and restated or modified from time to time) (the “Plan”), which is incorporated herein by reference and made a part of this Agreement. Capitalized terms not otherwise defined in this Agreement have the meanings ascribed to those terms in the Plan;

NOW THEREFORE, in consideration of the premises and mutual covenants set forth in this Agreement, the parties agree as follows:

1.Grant of Award. The Company hereby grants to the Participant, effective as of the Date of Grant, [●] performance stock units (“PSUs”), on the terms and conditions set forth in the Plan and this Agreement.

2.Vesting Start Date. [●]

3.Performance Periods. Three separate performance periods (each, a “Performance Period” apply to the PSUs pursuant to which the following number of PSUs are eligible to vest each Performance Period:

Performance Period	Number of PSUs Eligible to Vest in Performance Period
[-]	[●]
[-]	[●]
[-]	[●]

4.Vesting and Settlement of PSUs.

(a)General. Subject to the terms and conditions set forth in the Plan and this Agreement, PSUs are eligible for vesting based on the achievement of Top Line Revenue targets and Adjusted EBITDA targets (the “Performance Goals”) as defined and set forth on Annex A hereto for the applicable Performance Period (or as will be determined for one or more Performance Periods to the extent not set forth on Annex A). If all or a portion of the PSUs do not vest for a particular Performance Period based on achievement of the Performance Goals, such unvested PSUs will remain outstanding and will be eligible for vesting if the Company achieves the market capitalization milestone (the “Market Cap Milestone”) set forth on Annex A at any time on or prior to [-]. In the event the

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Market Cap Milestone is achieved on or prior to [-], all then outstanding unvested PSUs will become fully vested as of the Vesting Date (as defined below).

(b)Determination of Vested PSUs. PSUs will be treated as vested only as of the date the Committee determines the level of achievement of the Performance Goals for a Performance Period or the achievement of the Market Cap Milestone (the date of each such determination, a “Vesting Date”), subject to the Participant’s continued Service through the applicable Vesting Date.

(c)Settlement of Vested PSUs. Subject to the terms of this Agreement, the Company will deliver to the Participant within thirty (30) days following the Vesting Date, but in no event later than March 15th of the calendar year following completion of the applicable Performance Period or achievement of the Market Cap Milestone, as applicable, that number of shares of Common Stock equal to the aggregate number of PSUs that the Committee determines have vested (rounded up to the nearest whole PSU and reduced by any shares sold or withheld to satisfy tax withholding requirements). The Company may deliver such shares of Common Stock either through book entry accounts held by, or in the name of, the Participant or cause to be issued a certificate or certificates representing the number of shares of Common Stock to be issued in respect of the PSUs, registered in the name of the Participant.

(d)Forfeiture of Unvested PSUs. Subject to earlier forfeiture in the event of the Participant’s termination of Service as set forth in Section 5, all PSUs that do not become vested PSUs (including as a result of the Company not achieving the Market Cap Milestone on or prior to [-]) will be automatically forfeited to the Company without consideration. The Participant will have no further rights, and the Company will have no further obligations to the Participant, with respect to such unvested, forfeited PSUs.

(e)Change of Control. In the event of a Change in Control, all then outstanding unvested PSUs will become fully vested and paid out in within thirty (30) days of such Change in Control; provided that such Change in Control constitutes a “change in control event” as defined under Section 409A of the Plan.

5.Termination of Service. Upon a termination of the Participant’s Service for any reason prior to a Vesting Date, any then unvested PSUs as of such termination date will be automatically forfeited to the Company without consideration. The Participant will have no further rights, and the Company will have no further obligations to the Participant, with respect to such unvested, forfeited PSUs (even with respect to any “catch-up” vesting with respect to the Market Cap Milestone). The PSUs and the shares of Common Stock (and any resulting proceeds) will be subject to Sections 12.2 (Termination for Cause) and 12.3 (Right of Recapture) of the Plan.

For purposes of the PSUs, termination of Service will be considered to occur as of the date the Participant is no longer actively providing services to the Company or any Subsidiary (the “Service Recipient”), regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or otherwise rendering services or the terms of the Participant’s employment or service agreement, if any. Unless otherwise determined by the Committee, the Participant’s right to vest in the PSUs, if any, will cease as of this date and will not be extended by any notice period (e.g., the Participant’s period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction

2

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where the Participant is employed or otherwise providing services, or the terms of the Participant’s employment or service agreement, if any). The Company will have the exclusive discretion to determine when the Participant is no longer actively providing services for purposes of the PSUs (including whether the Participant may still be considered to be actively providing services while on leave of absence).

6.Tax Withholding Requirements.

(f)The Participant is ultimately responsible for all taxes owed in connection with the PSUs (e.g., upon vesting and/or receipt of shares thereunder) (“Tax-Related Items”), regardless of any action the Company takes with respect to such Tax-Related Items. The Company will have the right to deduct or withhold from any shares of Common Stock deliverable under this Agreement, or in its discretion to require the Participant to remit to the Company, amounts necessary to satisfy all federal, state, local and other taxes required to be withheld in connection with the settlement of the PSUs, including through open market sales of shares under the PSUs to generate proceeds to satisfy tax withholding obligations.

The Participant agrees to make adequate arrangements satisfactory to the Company and/or a Subsidiary, as applicable, prior to any relevant taxable or tax withholding event, as applicable, to satisfy any applicable tax withholding obligation related to Tax-Related Items. The Company has no obligation to issue shares pursuant to vested PSUs until the Participant has satisfied any tax withholding obligations related to the Tax-Related Items in a manner acceptable to the Company.
The Company may withhold or account for Tax-Related Items by considering statutory withholding rates or other applicable withholding rates, including maximum applicable rates in the Participant’s jurisdiction(s). In the event of over-withholding, the Participant may receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent in Common Stock, or if not refunded, the Participant may seek a refund from the applicable tax authorities. In the event of under-withholding, the Participant may be required to pay additional Tax-Related Items directly to the applicable tax authorities or to the Company and/or the Subsidiary to whom the Participant provides services.

(g)The Participant acknowledges that the Company and any Subsidiary to whom the Participant provides services (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the PSUs, including but not limited to, the grant, the vesting, the issuance of shares of Common Stock upon vesting, the subsequent sale of the shares acquired pursuant to the PSUs, and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the PSUs to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, the Participant acknowledges that if the Participant is subject to tax in more than one jurisdiction, the Company and/or a Subsidiary may be required to withhold or account for Tax-Related Items in more than one jurisdiction. By accepting the Award, the Participant agrees that the Participant will be deemed to have waived any claims against the Company with respect to any tax consequences related to the PSUs.

7.Non-Disclosure and Non-Use of the Company’s Trade Secrets or Confidential Information and Restricted Activities. In consideration of the PSUs granted under this Agreement,

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158303709.1

(h)At all times during and following the Participant’s Service, the Participant agrees that he or she will not, either directly or indirectly, and the Participant will not permit any Covered Entity which is Controlled by the Participant to, either directly or indirectly, (i) divulge, use, disclose (in any way or in any manner, including by posting on the Internet), reproduce, distribute, or reverse engineer or otherwise provide the Company’s Trade Secrets or Confidential Information to any person, firm, corporation, reporter, author, producer or similar person or entity; (ii) take any action that would make available Trade Secrets or Confidential Information to the general public in any form; (iii) take any action that uses Trade Secrets or Confidential Information to solicit any client or prospective client of the Company; or (iv) take any action that uses Trade Secrets or Confidential Information for solicitation or marketing for any service or product or on the Participant’s behalf or on behalf of any entity other than the Company with which the Participant may become associated, except (i) as required in connection with the performance of such Participant’s duties to the Company, (ii) as required to be included in any report, statement or testimony requested by any municipal, state or national regulatory body having jurisdiction over the Participant or any Covered Entity which is Controlled by the Participant, (iii) as required in response to any summons or subpoena or in connection with any litigation, (iv) to the extent necessary in order to comply with any law, order, regulation, ruling or governmental request applicable to the Participant or any Covered Entity which is Controlled by the Participant, (v) as required in connection with an audit by any taxing authority, or (vi) as permitted by the express written consent of the Board. In the event that the Participant or any such Covered Entity which is Controlled by the Participant is required to disclose Trade Secrets or Confidential Information pursuant to the foregoing exceptions, the Participant will promptly notify the Company of such pending disclosure and assist the Company (at the Company’s expense) in seeking a protective order or in objecting to such request, summons or subpoena with regard to the Trade Secrets or Confidential Information. If the Company does not obtain such relief after a period that is reasonable under the circumstances, the Participant (or such Covered Entity) may disclose that portion of the Trade Secrets or Confidential Information which counsel to such party advises such party that they are legally compelled to disclose. In such cases, the Participant will promptly provide the Company with a copy of the Trade Secrets or Confidential Information so disclosed. This provision applies without limitation to unauthorized use of Trade Secrets or Confidential Information in any medium, writings of any kind containing such information or materials, including books, and articles, blogs, websites, or writings of any other kind, or film, videotape, or audiotape. If, and only if, the controlling state law applicable to the Participant requires a time limit to be placed on restrictions concerning the post-employment use of Confidential Information for the restriction to be enforceable, then this restriction on the Participant’s use of Confidential Information that is not a Trade Secret will expire two (2) years after the Participant’s employment or other association with the Company ends. This time limit will not apply to Confidential Information that qualifies as a Trade Secret. The Company’s trade secrets will remain protected for as long as they qualify as trade secrets under applicable law.

(i)Notwithstanding the Participant’s confidentiality obligations set forth in this Section 7, the Participant understands that, pursuant to the Defend Trade Secrets Act of 2016, the Participant will not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a Trade Secret that: (i) is made (x) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (y) solely for the purpose of reporting

4

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or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. The Participant understands that in the event it is determined that disclosure of the Trade Secrets of the Company or any of its Subsidiaries or Affiliates was not done in good faith pursuant to the above, the Participant will be subject to substantial damages under federal criminal and civil law, including punitive damages and attorneys’ fees.

(j)Notwithstanding anything to the contrary contained herein, nothing in this Agreement will limit or interfere with the Participant’s right, without notice to or authorization of the Company, to communicate and cooperate in good faith with a Government Agency for the purpose of (i) reporting a possible violation of any U.S. federal, state, or local law or regulation, (ii) participating in any investigation or proceeding that may be conducted or managed by any Government Agency, including by providing documents or other information, or (iii) filing a charge or complaint with a Government Agency. For purposes of this Agreement, “Government Agency” means the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, or any other self-regulatory organization or any other federal, state or local governmental agency or commission.

(k)The Participant understands that nothing in this Agreement prohibits or restricts the Participant from disclosing the Participant’s own compensation. The Participant understands that if the Participant is a nonsupervisory employee, nothing in this Agreement prohibits or restricts the Participant from disclosing the Participant’s or others’ terms and conditions of employment, compensation, hours or working conditions with coworkers or union representatives or exercising protected rights under Section 7 of the National Labor Relations Act to the extent that such rights cannot be waived by the Agreement.

(l)The Participant understands that nothing in this Agreement prevents the Participant from discussing or disclosing information about conduct that the Participant reasonably believes is unlawful discrimination, harassment, or retaliation, a wage-and-hour violation, or sexual assault, that is recognized as unlawful under state, federal or common law, or that is recognized as against a clear mandate of public policy, occurring in the workplace, at work-related events coordinated by or through the Company, or between employees, or between the Company and an employee, whether on or off the employment premises.

8.Non-Compete; Non-Solicitation; and Non-Disparagement. In further consideration of the PSUs granted under this Agreement:

(m)Non-Competition. During the term of the Participant’s Service and for 12 months following the termination of the Participant’s Service (the “Restricted Period”), the Participant will not, directly or indirectly, whether for pay or otherwise (i) form or assist others in forming, be employed by, render services of an executive, advertising, marketing, sales, administrative, supervisory technical, research, purchasing or consulting nature, or otherwise assist or lend the Participant’s name, counsel or assistance to, any person or entity that engages in a business that competes with or intends to compete with the Business.

(n)Non-Solicitation. During the term of the Participant’s Service and during the Restricted Period, the Participant agrees that Participant will not, in any manner,

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directly or indirectly, solicit any customer or, where allowed by law, Prospective Customer of the Company to whom the Participant provided services, with or for whom the Participant transacted business, or about whom the Participant learned Trade Secrets or Confidential Information during the six (6) months prior to the Participant’s termination, in each case, for the purpose of providing goods or services competitive with the Business. A “Prospective Customer” is any person or entity with whom the Participant has communicated or whom the Participant solicited for the purposes of obtaining or transacting business and/or whom the Participant has analyzed concerning potential business at any time prior to the termination of the Participant’s Service with the Company.

(o)Non-Solicitation of Participants. During the Restricted Period, the Participant agrees that he or she will not, in any manner, directly or indirectly, solicit, hire, attempt to solicit or attempt to hire any person who is a non-administrative (i.e., non-clerical) employee of the Company, or an employee under the Participant’s control, in each case, during the six (6) months prior to the Participant’s termination, to apply for or accept employment with any person or entity that provides goods or services competitive with the Business, unless the Company first terminated the employment of such person.

(p)The Participant understands and acknowledges that Sections 8(a),(b) and (c), which contain noncompetition and nonsolicitation provisions, will apply only if and when the Participant’s annualized Earnings (as defined in Section 8(e)) exceed one hundred seven thousand three hundred one dollars and four cents ($107,301.04) per year. The dollar amounts specified in this Section 8(d) will be adjusted annually for inflation in accordance with Chapter 299, Washington State Laws of 2019 (Enacted May 8, 2019).

(q)"Earnings" means the compensation reflected on box 1 of the Participant’s United States Internal Revenue Service Form W-2 from the Company that is paid to the Participant over the prior year, or portion thereof for which the Participant was employed, annualized and calculated as of the earlier of the date that enforcement of the noncompetition covenant is sought or the date of separation from employment.

(r)The Participant agrees that during the Restricted Period, regardless of whether the Participant is subject to Sections 8(b) and (c), the Participant will not, directly or indirectly, (i) solicit (including without limitation by recruiting or otherwise making efforts to hire) any employee of the Company to leave the Company, or (ii) solicit any customer of the Company to cease or reduce the extent to which it is doing business with the Company.

(s)The Participant agrees that during the Restriction Period, the Participant will inform any entity or person with whom the Participant may seek to enter into a business relationship (whether as an owner, employee, independent contractor or otherwise) of the Participant’s contractual obligations under this Agreement. The Participant also understands and agrees that the Company may, with or without prior notice to the Participant and during or after the term of the Participant’s Service, notify third parties of the Participant’s agreements and obligations under this Agreement. The Participant further agrees that, upon written request by the Company, the Participant will respond to the Company in writing regarding the status of the Participant’s employment or proposed employment with any party during the Restriction Period.

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(t)Non-Disparagement. The Participant agrees and covenants that the Participant will not make, publish, or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments, or statements concerning the Company, or any of its products, services, employees, officers, and existing and prospective customers, suppliers, investors, and other associated third-parties. This Section does not, in any way, restrict or impede the Participant from exercising the Participant’s rights under Section 7 of the National Labor Relations Act to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. The Participant will promptly provide written notice of any such order to an authorized officer of the Company immediately after receiving such order, but in any event sufficiently in advance of making any disclosure to permit the Company to contest the order or seek confidentiality protections, as determined in the Company’s sole discretion.

9.Enforcement; Remedies. The Participant acknowledges that the Participant’s expertise in the Business is of a special and unique character which gives this expertise a particular value, and that a breach of Sections 7 or 8 by the Participant will cause serious and potentially irreparable harm to the Company. The Participant therefore acknowledges that a breach of Sections 7 or 8 by the Participant cannot be adequately compensated in an action for damages at law, and equitable relief would be necessary to protect the Company from a violation of this Agreement and from the harm which this Agreement is intended to prevent. By reason thereof, the Participant acknowledges that the Company is entitled, in addition to any other remedies it may have under this Agreement or otherwise, to preliminary and permanent injunctive and other equitable relief to prevent or curtail any breach of this Agreement. The Participant acknowledges, however, that no specification in this Agreement of a specific legal or equitable remedy may be construed as a waiver of or prohibition against the Company pursuing other legal or equitable remedies in the event of a breach of this Agreement by the Participant. For purposes of Sections 7 and 8, “Company” will specifically include the Company and its direct and indirect parent entities, subsidiaries, successors and assigns. If the Participant fails to comply with a restriction in this Agreement that applies for a limited period of time after employment, the time period for that restriction will be extended by the greater of either: one day for each day the Participant is found to have violated the restriction, or the length of the legal proceeding necessary to secure enforcement of the restriction; provided, however, that this extension of time will be capped so that the extension of time does not exceed two years from the date their employment ended, and if this extension would make the restriction unenforceable under applicable law it will not be applied (“Fairness Extension”).

10.Definitions.

(u)“Business” means the business of a technology-enabled marketplace that allows consumers to access information about, and/or place orders for, cannabis (including hemp) brands, products and/or services, and any other business engaged in or service rendered by, or a business or services planned to be entered into by, the Company during the term of the Participant’s Service.

(v)“Confidential Information” means any data or information, without regard to form, other than Trade Secrets, that is valuable to the Company and is not generally known by the public. To the extent consistent with the foregoing, Trade Secrets or Confidential Information includes, but is not limited to: (i) the names, addresses, phone numbers, accounts, financial information, and other information

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concerning patients, referral sources, payors (employers, managed care organizations, workers compensation insurers, and other types of payors) and other clients of the Company; (ii) non-public information and materials describing or relating to the Company’s business or financial affairs, including but not limited to financial and/or investment performance information, personnel matters, products, operating procedures, organizational responsibilities, marketing matters, or policies or procedures of the Company; or (iii) information and materials describing the Company’s existing or new products and services, including analytical data and techniques, and product, service or marketing concepts under development at or for the Company, and the status of such development. Trade Secrets or Confidential Information does not include information that, other than as a result of a breach by the Participant of this Agreement, (x) is or becomes generally known within the relevant industry, or (y) is or becomes known to the Participant other than through the Participant’s work for the Company, or (z) is or becomes generally available to the public.

(w)“Control” means (i) in the case of a corporate entity, direct or indirect ownership of at least fifty percent (50%) of the stock or securities entitled to vote for the election of directors; and (ii) in the case of a non-corporate entity (such as a limited liability company, partnership or limited partnership), either (x) direct or indirect ownership of at least fifty percent (50%) of the equity interests in such entity, or (y) the power to direct the management and policies of such entity.

(x)“Covered Entity” means every Affiliate of the Participant, and every business, association, trust, corporation, partnership, limited liability company, proprietorship or other entity in which the Participant has an investment (whether through debt or equity securities), or maintains any capital contribution or made any outstanding advances to, or in which any Affiliate of the Participant has an ownership interest or profit sharing percentage, or a firm from which the Participant or any Affiliate of the Participant receives or is entitled to receive income, compensation or consulting fees in which the Participant or any Affiliate of the Participant has an interest as a lender (other than solely as a trade creditor for the sale of goods or provision of services that do not otherwise violate the provisions of this Agreement). The agreements of the Participant contained herein specifically apply to each entity which is presently a Covered Entity (so long as it remains a Covered Entity) or which becomes a Covered Entity subsequent to the date of this Agreement.

(y) “Trade Secrets” means information, without regard to form, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, a prototype, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers which is not commonly known by or available to the public and which information: (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Trade Secrets also include any information or data described above that the Company obtains from another party and that the Company treats as proprietary or designates as a Trade Secrets, whether or not owned or developed by the Company.

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11.Compliance with Law.

(a)    Notwithstanding any other provision of this Agreement, shares of Common Stock will not be issued upon PSU vesting unless the shares issuable are registered under the Securities Act or, if such shares are not then so registered, the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. The PSUs and the issuance of any shares of Common Stock thereunder also must comply with all other applicable laws and regulations governing the PSUs and the shares issuable thereunder, including any U.S. and non-U.S. state, federal, and local applicable laws, and the Participant will not receive shares if the Company determines that such receipt would not be in material compliance with such applicable laws.

(b)    The Participant understands that the Company is under no obligation to register or qualify the PSUs or the shares issuable upon vesting of the PSUs with the U.S. Securities and Exchange Commission or any state or foreign securities commission (or maintain any such registration or qualification if made) or to seek approval or clearance from any governmental authority for the issuance or sale of such shares. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares will relieve the Company of any liability in respect of the failure to issue or sell the shares as to which such requisite authority is not obtained. Further, the Participant agrees that the Company will have unilateral authority to amend the Plan and this Agreement without the Participant’s consent to the extent necessary to comply with securities or other laws applicable to the issuance of the shares.

SHARES MAY NOT BE ISSUED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.

(c)    The Participant hereby agrees that he or she will in no event sell or distribute all or any part of the shares that may be received pursuant to the settlement of vested PSUs unless (i) there is an effective registration statement under the Securities Act, or (ii) the Company receives an opinion of the Participant’s legal counsel (concurred by legal counsel for the Company) stating that such transaction is exempt from registration or the Company otherwise satisfies itself that such transaction is exempt from registration. Sales of the Shares are also subject to compliance with other laws and regulations, including, but not limited to, U.S. and non-U.S. securities, exchange control, insider trading and market abuse laws, and with the Company’s insider trading policy.

12.Nature of Grant.

By accepting the Award, the Participant acknowledges, understands and agrees that:

(z)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;

(aa)the grant of PSUs is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of PSUs, or benefits in lieu of PSUs, even if PSUs have been granted in the past;

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(ab)all decisions with respect to future PSU grants or other grants, if any, will be at the sole discretion of the Company;

(ac)the Participant is voluntarily participating in the Plan;

(ad)the PSUs and the Shares underlying the PSUs, and the income from and value of same, are not intended to replace any pension rights or compensation;

(ae)the PSUs and the Shares underlying the PSUs, and the income from and value of same, are not part of normal or expected compensation for purposes of, including but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, holiday pay, holiday top-up, pension or retirement or welfare benefits or similar mandatory payments;

(af)the future value of the shares underlying the PSUs is unknown, indeterminable and cannot be predicted with certainty; and

(ag)no claim or entitlement to compensation or damages will arise from forfeiture of the PSUs resulting from (a) the Participant’s termination of Service (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or providing services or the terms of the Participant’s employment or service agreement, if any) or (b) the application of Section 13(c) of this Agreement or any compensation recovery or clawback policies adopted by the Company.

13.Miscellaneous Provisions.

(ah)Rights of a Stockholder. Prior to settlement of the PSUs in shares of Common Stock, neither the Participant nor the Participant’s representatives will have any rights as a stockholder of the Company with respect to any shares of Common Stock underlying the PSUs.

(ai)Transfer Restrictions. PSUs may not be sold, transferred, assigned, encumbered, pledged or otherwise disposed of, whether voluntarily or by operation of law, during the Participant’s lifetime. The shares of Common Stock delivered hereunder will be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the Securities and Exchange Commission, NASDAQ or any stock exchange upon which such shares of Common Stock are listed, any applicable federal or state laws and any agreement with, or policy of, the Company or the Committee to which the Participant is a party or subject, and the Committee may cause orders or designations to be placed upon the books and records of the Company’s transfer agent to make appropriate reference to such restrictions.

(aj)Clawback Policy. The Participant acknowledges that the Participant is subject to the provisions of Section 12 (Forfeiture Events) and Section 14.6 (Trading Policy and Other Restrictions) of the Plan and any compensation recovery, “clawback” or similar policy adopted by the Company from time to time and/or made applicable by law including the provisions of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection and Act and the rules, regulations and requirements adopted thereunder by the Securities and Exchange Commission and/or any national securities exchange on which the Company’s equity securities may be listed.

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(ak)Dividends; Adjustments. The Participant will receive no benefit or adjustment to PSUs with respect to any cash dividend, stock dividend or other distributions; provided that in the event of any change with respect to the outstanding shares of Common Stock contemplated by Section 4.5 of the Plan prior to delivery, the PSUs may be adjusted in accordance with Section 4.5 of the Plan.

(al)No Right to Continued Service. Nothing in this Agreement or the Plan confers upon the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause.

(am)No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s participation in the Plan or the Participant’s acquisition or sale of shares underlying the PSUs. The Participant should consult with the Participant’s own personal tax, legal and financial advisors regarding participation in the Plan before taking any action related to the Plan.

(an)Successors and Assigns. The provisions of this Agreement will inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Participant, the Participant’s executor, personal representative(s), distributees, administrator, permitted transferees, permitted assignees, beneficiaries, and legatee(s), as applicable, whether or not any such person will have become a party to this Agreement and have agreed in writing to be joined herein and be bound by the terms hereof.

(ao)Severability. The provisions of this Agreement are severable, and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, then the remaining provisions will nevertheless be binding and enforceable.

(ap)Amendment. Except as otherwise provided in the Plan, this Agreement will not be amended unless the amendment is agreed to in writing by both the Participant and the Company.

(aq)Imposition of Other Requirements. The Company reserves the right to impose other requirements on the Participant’s participation in the Plan, on the PSUs and on any shares acquired under the Plan to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

(ar)No Waiver. No waiver of any provision of this Agreement will be valid unless in writing and signed by the person against whom such waiver is sought to be enforced, nor will failure to enforce any right hereunder constitute a continuing waiver of the same or a waiver of any other right hereunder.

(as)Choice of Law; Jurisdiction. This Agreement and all claims, causes of action or proceedings (whether in contract, in tort, at law or otherwise) that may be based upon, arise out of or relate to this Agreement will be governed by the internal laws of the State of Washington, excluding any conflicts or choice-of-law rule or

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principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

(at)Section 409A Compliance. The Company intends that the PSUs will be exempt from, or comply with, the requirements of Section 409A of the Code; provided, however, that the Company makes no representations that the PSUs will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to the PSUs. If necessary for exemption from, or compliance with, Section 409A of the Code, each installment that vests or is delivered under an Award in a series of payments or installments will be treated as a separate payment for purposes of Section 409A of the Code.

(au)Signature in Counterparts. This Agreement may be signed in counterparts, manually or electronically, each of which will be an original, with the same effect as if the signatures to each were upon the same instrument.

(av)Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to any Awards granted under the Plan by electronic means or to request the Participant’s consent to participate in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

(aw)Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. The Participant has read and understands the terms and provisions of the Plan and this Agreement, and accepts the PSUs subject to all of the terms and conditions of the Plan and this Agreement. In the event of a conflict between any term or provision contained in this Agreement and a term or provision of the Plan, the applicable term and provision of the Plan will govern and prevail.

[Signature page follows.]

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Form Employee PSU Award Agreement -WA

    IN WITNESS WHEREOF, the Company and the Participant have executed this Performance Stock Unit Award Agreement as of the dates set forth below.

PARTICIPANT                    LEAFLY HOLDINGS, INC.

_________________________________        By: ______________________________

Date:_____________________________        Date: _____________________________

[Signature Page – PSU Award Agreement]

158303709.1

EX-10.2

CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE

WHEREAS Leafly Holdings, Inc. (“Leafly” or the “Company”), a Delaware corporation headquartered in Seattle, Washington, and Kimberly Boler (“Employee”), a resident of the State of New York (collectively, the “parties”) have decided to end their at-will employment relationship effective close of business on September 9, 2022;

AND WHEREAS Company and Employee desire to provide Employee with a separation benefit to which she would not otherwise be entitled and to resolve any possible disputes between them arising out of Employee’s employment and her separation from employment;

    NOW, THEREFORE, in consideration of the above recitals and the mutual promises of the parties as set forth below, the sufficiency of which are hereby acknowledged, this Confidential Separation Agreement and General Release ("Agreement") is entered into by and between Employee and Company:

1.    Confidentiality of Agreement. Employee agrees to keep this Agreement confidential and agrees not to disclose any information contained in this Agreement, except she may disclose such information to her spouse or domestic partner, her tax or financial advisors, or as otherwise required by law. Employee agrees to inform each individual to whom such disclosure is made of the confidentiality provisions of this Agreement.

2.    Separation from Employment. Employee’s at-will employment with Company will end at the close of business on September 9, 2022 (the "Separation Date"). Employee represents and warrants that she has not participated in any wrongdoing, including without limitation any misrepresentation to or with regard to Company or in any violation of law in connection with her employment. Employee acknowledges and agrees upon receipt of her salary and benefits through the Separation Date that she has received all wages, bonuses, incentives, benefits or other compensation due to her for services rendered to and duties performed for Company and that the Separation Benefits described in this document are in excess of anything otherwise owed to her by Company.

Employee further specifically acknowledges that Company has granted to her all leave rights to which she believes herself entitled under the Family Medical Leave Act (“FMLA”) and applicable state law, and that Company has fully honored and respected all of its leave policies. Employee’s rights under COBRA shall be the same as any other terminating employee.

3.Separation Benefit. In consideration of Employee’s effective release and other performances set forth below, Company agrees to provide Employee with the following Separation Benefits:

A.Fifty-Seven Thousand Six Hundred Ninety Two Dollars and Thirty One Cents ($57,692.31), representing eight weeks of base salary, less all applicable taxes required to be withheld by the Company.Employee further acknowledges and agrees that she is not owed any bonus or incentive compensation;

B.Waiver of Employee’s obligation to repay a relocation bonus of Forty Thousand Dollars ($40,000); and

C.Acceleration of 21,690 Restricted Stock Units, which shall be fully vested as of the Separation Date.

Employee assumes full responsibility for any and all liens, claims, taxes, interest or penalties, which may be due and owing by her to any local, state or federal taxing authority or to any

158149679.1

person in connection with her receipt of these Separation Benefits, however or whenever arising. Employee agrees to defend, indemnify and hold Company harmless from any and all liens, claims, taxes (other than taxes for which Company is responsible as an employer with respect to W-2 wages), interest or penalties in connection with her receipt of the Separation Benefit, regardless of when or how incurred.

4.    Release. In exchange for the Separation Benefit provided for herein, and except for the obligations assumed by Company herein, Employee, individually and on behalf of any marital community, releases and forever discharges Company, its successors and assigns, along with all of its directors, trustees, officers, employees, members, corporate parents, subsidiaries or affiliates, grantees, and attorneys or agents (collectively “the Released Parties”) from any and all claims, demands or causes of action of any nature whatsoever, whether known or unknown, arising before the execution of this Agreement and in any way connected with Employee’s status as an employee or other relationship with Company, whether based in tort or contract, and/or on any federal, state or local law, statute or regulation. The parties represent and warrant that no promise or inducement has been offered except as set forth in this Agreement; that this Agreement is executed without reliance upon any statement or representation by either party to the other regarding the nature and extent of any liability of one to the other. EXCEPT AS EXPRESSLY SET FORTH HEREIN, EMPLOYEE SPECIFICALLY UNDERSTANDS THAT BY EXECUTING THIS AGREEMENT, SHE IS GIVING UP ANY AND ALL RIGHTS AND CLAIMS SHE MAY HAVE AGAINST THE RELEASED PARTIES WITH RESPECT TO EVENTS OCCURRING ON OR BEFORE THE EXECUTION OF THIS AGREEMENT, INCLUDING UNKNOWN CLAIMS. Employee specifically understands that she is not entitled to any other compensation, benefit or payment from Company other than that expressly set forth in this Agreement. Specifically included in this release, but not by way of limitation, is any claim for breach of contract, wrongful discharge, retaliation, violation of public policy, defamation, mental distress, or employment discrimination of any sort, including but not limited to claims arising under the Age Discrimination in Employment Act (“ADEA”), Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, as amended, the FMLA or the Washington Law Against Discrimination, based on age, gender, disability or any other protected category, as well as any claims under the Employee Retirement Income Security Act of 1974 ("ERISA"), the Washington Minimum Wage Act, and/or the Washington Industrial Welfare Act, as well as any claims she may have under the any New York state, city, or other municipal statutory law or regulation, including but not limited to the New York State Human Rights Law, N.Y. Exec. Law §§ 290, et seq.; the New York City Human Rights Law, N.Y.C. Admin. Code §§ 8-101, et seq., New York Labor Law §160, et. seq., the New York Equal Pay Law, the New York Whistleblower Act, New York Labor Law, and the New York State Worker Adjustment and Retraining Notification Act, and any other local, state or federal law, statute, regulation or common law or public policy doctrine. Employee warrants that she has not filed any claim for damages, lawsuit or any other action against the Released Parties with respect to the foregoing, and that she has not assigned any such claim or cause of action to any other person.

Acknowledgment of Rights and Waiver of Claims Under the Age Discrimination in Employment Act (“ADEA”). Employee further agrees and acknowledges that she is knowingly and voluntarily waiving and releasing any rights she may have under the ADEA and the Older Workers Benefits Protection Act of 1990 (OWBPA). Employee also acknowledges that the consideration given for the waiver and release is in addition to anything of value to which she was already entitled. Employee further acknowledges that she has been advised by this writing, as required by the OWBPA, that: (a) her waiver and release does not apply to any rights or claims that may arise after the Effective Date of this Agreement; (b) she has been advised in writing that she should consult with an attorney prior to executing this Agreement and has been provided with at least twenty-one (21) days within which to do so; (c) she has at least twenty-one (21) days to consider this Agreement (although she may by her own voluntary choice execute

158149679.1

this Agreement earlier); (d) she has seven (7) days following her/his execution of this Agreement to revoke the Agreement and (e) this Agreement shall not be effective until the date upon which the revocation period has expired. Employee may revoke this Release only by giving the Company formal, written notice of her revocation to Chief People Officer at 111 South Jackson, Suite 531, Seattle, WA 98104, to be received by the Company by 5:00 PM Pacific time on the seventh (7th) day following his execution of this Agreement. Employee further acknowledges and agrees that she has read this Agreement, understands it, and the Agreement is written in a manner that she understands. The Parties also agree that changes, whether material or immaterial, do not restart the running of the twenty-one (21) day period.

5.Return of Company Property. Employee represents and warrants that she has returned to Company all property and equipment furnished to or prepared by her or her colleagues in the course of or incident to her application for and employment by Company, including, without limitation, all books, manuals, records, reports, notes, contracts, lists and other documents or materials, or copies thereof (including computer files), the master key, any Company credit card, computer and phone equipment, agreements and all other proprietary information belonging or relating to the business of Company. Employee’s obligations under this Agreement preclude her from keeping any copies of Company’ property or documents without Company’ express written permission for each such item of which she wishes to retain a copy.

6.Confidentiality of Company Information. Employee warrants and represents that she has not previously and will not in the future disclose or use confidential information related to Company’ vendors, clients, personnel, designs, marketing plans, budgets, strategies, financial or other proprietary information that is not otherwise available to the general public, and that she will at all times continue to keep all such information confidential.

7.Nondisparagement and Noninterference. Employee agrees that she will not disparage Company, its officers, board members, directors, employees, residents, donors, vendors, members or agents in any way prior to the execution of this agreement, now or in the future. Employee further agrees that she will not make any statements, nor will she take any actions, which would have the effect of hampering Company’ ongoing relationships with its officers, directors, employees, clients, vendors, consultants, members or agents. This provision shall not prevent the provision of truthful testimony in any proceeding or making disclosures that are protected under any applicable federal, state or local law or regulation. Further, this provision in no way limits Employee’s ability to make truthful disclosures to governmental authorities about factual or other information relating to potential discrimination, harassment, retaliation, wage and hour violations, or sexual assault occurring at Company (including at any work-related events coordinated by or through the Company, or involving the Company’s employees).

Company agrees that the Company’s Board of Directors as of the date this Agreement is executed by the Company, and the Company’s officers and executives as of the date this Agreement is executed by the Company, will not disparage Employee to third parties in any way now or in the future. This provision shall not prevent the provision of truthful testimony in any proceeding or the filing of any reports that may be required by applicable law.

Employee agrees that she will direct any inquiries from prospective or future employers to the Company’s Chief People Officer. In the event that an inquiry from a prospective or future employer is directed to any member of the Company’s Board of Directors, or to any officers or executives other than the Chief People Officer, Employee agrees that those individuals will be directed to the Company’s Chief People Officer. Company agrees that, in the event that it receives any inquiries about Employee from prospective employers, those inquiries will be directed for reply to the Chief People Officer or her designee, who will respond exclusively in

158149679.1

writing and confirm in writing only the following: “Employee began employment with Leafly on September 29, 2021 and held the position of General Counsel through September 9, 2022. Under the Company’s policies, no further information is provided.”

8.    Noncompetition. Employee acknowledges that she will continue to be bound by the terms of the Proprietary Information and Inventions Agreement executed by Employee on or about September 7, 2021, including without limitation the noncompetition clause, which provides, in part, that during the term of employment with the Company and for one year following the termination of Employee’s relationship with the Company for any reason, the employee will not, without the Company’s prior written consent, directly or indirectly work on any products or services that are competitive with products or services (a) being commercially developed or exploited by the Company during Employee’s employment or consultancy and (b) on which Employee worked or about which Employee learned Proprietary Information during her employment or consultancy with the Company. This restriction shall apply in any geographical region in which the Company conducts business or plans to conduct business.

9.    Remedies. The parties acknowledge that the obligations in Sections 4, 6, and 7 are material parts of the consideration flowing to Company as an inducement for Company to enter into this Agreement and for Company to provide the Separation Benefit set forth herein. Further, the parties agree that the harm to Company from any breach of obligations under Sections 4, 6, or 7 by Employee may be wholly or partially irreparable, and agree that such obligations may be enforced by injunctive relief and other appropriate remedies.

10.    No Other Claims Filed or Pending. Employee represents there are no actions at law or administrative proceedings currently pending which concern her employment with the Company. Employee represents and warrants that she has not assigned any claim released under this Agreement. Employee further agrees that she will not file any claim or charge against the Company and will withdraw any such action, claim or charge previously filed arising from or in any way connected with her employment with the Company. However, nothing in this Agreement shall prohibit Employee from filing a charge with, providing information to, or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission or the equivalent state or local agency, the National Labor Relations Board, or the Securities and Exchange Commission. If Employee files a charge with any such agency, Employee agrees to waive any claim for or entitlement to damages or monetary recovery directly from the Company based on any such charge and any civil action related to any such charge.

11.    General Provisions. This Agreement contains the entire understanding of the parties and constitutes the exclusive agreement with respect to the subject matter hereof, and this Agreement supersedes any and all prior negotiations, agreements or understandings of the parties. No waiver of or forbearance to enforce any right or provision hereof shall be binding unless in writing and signed by the party to be bound, and no such waiver or forbearance in any instance shall apply to any other instance or to any other right or provision. This Agreement may only be amended in a written document signed by both parties. Each party warrants that she or it is the true party in interest and fully authorized to execute this Agreement. Employee's rights and duties hereunder are personal to her and are not assignable to others, but her obligations hereunder will bind her heirs, successors, and assigns. Company may assign its rights under this Agreement, along with the assumption of its obligations hereunder. The provisions of the Agreement are severable. If any provision of this Agreement is held to be invalid or unenforceable to any extent in any context, it shall nevertheless be enforced to the fullest extent allowed by law in that and other contexts, and the validity and force of the remainder of this Agreement shall not be affected thereby.

158149679.1

12.    Jurisdiction. This Agreement will be governed by the local laws of the State of Washington without regard to its conflicts of laws or rules to the contrary, except to the extent superseded by federal law, including ERISA. The parties hereby consent to the exclusive jurisdiction and venue of the state and federal courts residing in King County, Washington for all matters and actions arising under this Agreement. The prevailing party shall be entitled to reasonable attorneys' fees and costs incurred in connection with such litigation. No term hereof shall be construed to limit or supersede any other right or remedy of Company under applicable law with respect to the protection of trade secrets or otherwise.

13.    Counterparts. This Agreement may be signed in counterparts, each such counterpart being as fully effective as if a single original had been signed. A facsimile or electronic signature shall be binding on the person so signing.

    PLEASE READ CAREFULLY. THIS IS A VOLUNTARY AGREEMENT THAT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

EACH OF THE UNDERSIGNED DECLARES THAT THE TERMS OF THIS RELEASE AGREEMENT HAVE BEEN COMPLETELY READ AND ARE FULLY UNDERSTOOD, AND BY EXECUTION HEREOF, THE UNDERSIGNED VOLUNTARILY AND KNOWINGLY ACCEPTS THE TERMS WITH THE INTENT TO BE LEGALLY BOUND THEREBY. EMPLOYEE FURTHER ACKNOWLEDGES THAT SHE HAS BEEN MADE AWARE OF HER RIGHT TO CONSULT WITH AN ATTORNEY REGARDING THE AGREEMENT AND HAS BEEN GIVEN AT LEAST TWENTY-ONE DAYS TO DO SO.

/s/Kimberly Boler Kimberly Boler, individually and on behalf of any marital community or state-registered domestic partner Date:September 9, 2022 LEAFLY HOLDINGS, INC. By: /s/Yoko Miyashita Yoko Miyashita CEO Date: September 9, 2022

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EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Yoko Miyashita, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 of Leafly Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2022                    By:

/s/ Yoko Miyashita

Yoko Miyashita

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Suresh Krishnaswamy, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, of Leafly Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2022             By:

/s/ Suresh Krishnaswamy

Suresh Krishnaswamy

Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Yoko Miyashita, the Chief Executive Officer of Leafly Holdings, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Leafly Holdings, Inc. for the quarterly period ended September 30, 2022, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Leafly Holdings, Inc.

Date: November 14, 2022            By:

/s/ Yoko Miyashita

Yoko Miyashita

Chief Executive Officer

(Principal Executive Officer)

I, Suresh Krishnaswamy, the Chief Financial Officer of Leafly Holdings, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Leafly Holdings, Inc. for the quarterly period ended September 30, 2022, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Leafly Holdings, Inc.

Date: November 14, 2022            By:

/s/ Suresh Krishnaswamy

Suresh Krishnaswamy

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

This certification accompanies the Quarterly Report on Form 10-Q of Leafly Holdings, Inc. for the quarterly period ended September 30, 2022, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Leafly Holdings, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of such Quarterly Report on Form 10-Q), irrespective of any generalincorporation language contained in such filing.

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Cover - shares	9 Months Ended
	Sep. 30, 2022	Nov. 04, 2022
Entity Listings [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-39119
Entity Registrant Name	Leafly Holdings, Inc. /DE
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-2266022
Entity Address, Address Line One	113 Cherry Street, PMB 88154
Entity Address, City or Town	Seattle
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98104-2205
City Area Code	206
Local Phone Number	455-9504
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		40,035,568
Entity Central Index Key	0001785592
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false
Common Stock, $0.0001 Par Value
Entity Listings [Line Items]
Title of 12(b) Security	Common Stock, $0.0001 Par Value
Trading Symbol	LFLY
Security Exchange Name	NASDAQ
Warrants, exercisable for shares of common stock at an exercise price of $11.50 per share
Entity Listings [Line Items]
Title of 12(b) Security	Warrants, exercisable for shares of common stockat an exercise price of $11.50 per share
Trading Symbol	LFLYW
Security Exchange Name	NASDAQ

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CONSOLIDATED BALANCE SHEETS - UNAUDITED - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 27,829	$ 28,565
Accounts receivable, net of allowance for doubtful accounts of $958 and $1,848, respectively	2,610	2,958
Deferred transaction costs	0	2,840
Prepaid expenses and other current assets	3,569	1,347
Restricted cash	607	130
Total current assets	34,615	35,840
Property, equipment, and software, net	2,213	313
Total assets	36,828	36,153
Current liabilities
Accounts payable	1,375	3,048
Accrued expenses and other current liabilities	5,076	8,325
Deferred revenue	2,052	1,975
Current portion of convertible promissory notes, net	0	31,377
Total current liabilities	8,503	44,725
Non-current liabilities
Non-current portion of convertible promissory notes, net	28,726	0
Total non-current liabilities	29,723	0
Commitments and contingencies (Note 8)
Stockholders' deficit
Preferred stock; $0.0001 par value; 5,000 and 6,578 authorized, — and 6,140 issued and outstanding, and aggregate liquidation preference of $— and $19,436 at September 30, 2022 and December 31, 2021, respectively	0	1
Common stock; $0.0001 par value; 200,000 and 69,361 authorized at September 30, 2022 and December 31, 2021, respectively; 43,052 issued at September 30, 2022 and 25,086 shares issued and outstanding at December 31, 2021	4	3
Treasury stock, at cost; 3,081,086 and — shares held at at September 30, 2022 and December 31, 2021, respectively	(31,663)	0
Additional paid-in capital	89,194	61,194
Accumulated deficit	(58,933)	(69,770)
Total stockholders' deficit	(1,398)	(8,572)
Total liabilities and stockholders' deficit	36,828	36,153
Private warrants derivative liability
Non-current liabilities
Derivative liability	662	0
Escrow shares derivative liability
Non-current liabilities
Derivative liability	47	0
Stockholder earn-out rights derivative liability
Non-current liabilities
Derivative liability	$ 288	$ 0

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CONSOLIDATED BALANCE SHEETS - UNAUDITED (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 958	$ 1,848
Preferred stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Preferred stock, authorized (in shares)	5,000,000	6,578,000
Preferred stock, issued (in shares)	0	6,140,000
Preferred stock, outstanding (in shares)	0	6,140,000
Preferred stock, aggregate liquidation preference	$ 0	$ 19,436
Common stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	200,000,000	69,361,000
Common stock, issued (in shares)	43,052,000	25,086,000
Common stock, outstanding (in shares)		25,086,000
Treasury stock (in shares)	3,081,086	0

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CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Revenue	$ 11,781	$ 10,896	$ 35,251	$ 30,959
Cost of revenue	1,515	1,261	4,411	3,564
Gross profit	10,266	9,635	30,840	27,395
Operating expenses
Sales and marketing	6,403	4,999	21,529	13,148
Product development	3,406	3,522	10,927	9,905
General and administrative	6,489	4,949	20,730	10,485
Total operating expenses	16,298	13,470	53,186	33,538
Loss from operations	(6,032)	(3,835)	(22,346)	(6,143)
Interest expense, net	(705)	(590)	(2,119)	(698)
Change in fair value of derivatives	22,264	0	36,264	0
Other expense, net	(73)	(29)	(962)	(39)
Net income (loss)	$ 15,454	$ (4,454)	$ 10,837	$ (6,880)
Net income (loss) per share:
Basic (in usd per share)	$ 0.43	$ (0.18)	$ 0.31	$ (0.28)
Diluted (in usd per share)	$ 0.28	$ (0.18)	$ 0.27	$ (0.28)
Weighted average shares outstanding:
Basic (in shares)	35,580	24,923	35,260	24,832
Diluted (in shares)	43,215	24,923	38,704	24,832

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) - UNAUDITED - USD ($) shares in Thousands, $ in Thousands	Total	2021 Notes	Preferred Stock	Common Stock	Common Stock 2021 Notes	Treasury Stock	Additional Paid-In Capital	Additional Paid-In Capital 2021 Notes	Accumulated Deficit
Balance at the beginning (in shares) at Dec. 31, 2020			6,140	24,752
Balance at the beginning at Dec. 31, 2020	$ 2,069		$ 1	$ 2			$ 59,812		$ (57,746)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(1,109)								(1,109)
Stock-based compensation	181						181
Exercise of stock options (in shares)				36
Exercise of stock options	40						40
Balance at the end (in shares) at Mar. 31, 2021			6,140	24,788
Balance at the end at Mar. 31, 2021	1,181		$ 1	$ 2			60,033		(58,855)
Balance at the beginning (in shares) at Dec. 31, 2020			6,140	24,752
Balance at the beginning at Dec. 31, 2020	2,069		$ 1	$ 2			59,812		(57,746)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(6,880)
Balance at the end (in shares) at Sep. 30, 2021			6,140	24,979
Balance at the end at Sep. 30, 2021	(3,832)		$ 1	$ 2			60,791		(64,626)
Balance at the beginning (in shares) at Mar. 31, 2021			6,140	24,788
Balance at the beginning at Mar. 31, 2021	1,181		$ 1	$ 2			60,033		(58,855)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(1,317)								(1,317)
Stock-based compensation	340						340
Exercise of stock options (in shares)				49
Exercise of stock options	68						68
Balance at the end (in shares) at Jun. 30, 2021			6,140	24,837
Balance at the end at Jun. 30, 2021	272		$ 1	$ 2			60,441		(60,172)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(4,454)								(4,454)
Stock-based compensation	208						208
Exercise of stock options (in shares)				142
Exercise of stock options	142						142
Balance at the end (in shares) at Sep. 30, 2021			6,140	24,979
Balance at the end at Sep. 30, 2021	(3,832)		$ 1	$ 2			60,791		(64,626)
Balance at the beginning (in shares) at Dec. 31, 2021			6,140	25,086
Balance at the beginning at Dec. 31, 2021	(8,572)		$ 1	$ 3			61,194		(69,770)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(19,376)								(19,376)
Stock-based compensation	1,924						1,924
Exercise of stock options (in shares)				114
Exercise of stock options	127						127
Conversion of stock (in shares)			6,140	6,140	4,128
Conversion of stock	0	$ 33,024	$ (1)	$ 1				$ 33,024
Merger and recapitalization, net of fees (in shares)				2,007
Merger and recapitalization, net of fees	27,997						27,997
Stockholder contribution for debt issuance costs	924						924
Escrow shares derivative liability (in shares)				1,625
Escrow shares derivative liability	(6,867)						(6,867)
Private warrants derivative liability	(3,916)						(3,916)
Forward share purchase agreement derivative liability (in shares)				3,861
Forward share purchase agreement derivative liability	(14,170)						(14,170)
Stockholder earnout rights derivative liability	(26,131)						(26,131)
Balance at the end (in shares) at Mar. 31, 2022			0	42,961
Balance at the end at Mar. 31, 2022	(15,036)		$ 0	$ 4			74,106		(89,146)
Balance at the beginning (in shares) at Dec. 31, 2021			6,140	25,086
Balance at the beginning at Dec. 31, 2021	(8,572)		$ 1	$ 3			61,194		(69,770)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	10,837
Balance at the end (in shares) at Sep. 30, 2022			0	43,052		3,081
Balance at the end at Sep. 30, 2022	(1,398)		$ 0	$ 4		$ (31,663)	89,194		(58,933)
Balance at the beginning (in shares) at Mar. 31, 2022			0	42,961
Balance at the beginning at Mar. 31, 2022	(15,036)		$ 0	$ 4			74,106		(89,146)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	14,759								14,759
Stock-based compensation	464						464
Exercise of stock options (in shares)				29
Exercise of stock options	30						30
Balance at the end (in shares) at Jun. 30, 2022			0	42,990		0
Balance at the end at Jun. 30, 2022	217		$ 0	$ 4		$ 0	74,600		(74,387)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	15,454								15,454
Shares canceled (in shares)				(25)
Stock-based compensation	771						771
Exercise of stock options (in shares)				1
Exercise of stock options	1						1
Vesting of restricted stock units (in shares)				86
Settlement of forward share purchase agreement derivative liability	(17,841)						(17,841)
Purchase of treasury stock (in shares)						(3,081)
Purchase of treasury stock	0					$ (31,663)	31,663
Balance at the end (in shares) at Sep. 30, 2022			0	43,052		3,081
Balance at the end at Sep. 30, 2022	$ (1,398)		$ 0	$ 4		$ (31,663)	$ 89,194		$ (58,933)

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CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities
Net income (loss)	$ 10,837	$ (6,880)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	276	195
Stock-based compensation expense	3,159	729
Bad debt expense	1,023	841
Noncash lease costs	0	230
Noncash amortization of debt discount	369	0
Noncash interest expense associated with convertible debt	243	710
Noncash change in fair value of derivatives	(36,264)	0
Other	15	44
Changes in operating assets and liabilities:
Accounts receivable	(675)	(674)
Prepaid expenses and other current assets	(2,222)	(600)
Accounts payable	173	(3)
Accrued expenses and other current liabilities	(2,141)	1,713
Deferred revenue	77	594
Net cash used in operating activities	(25,130)	(3,101)
Cash flows from investing activities
Additions of property, equipment, and software	(2,194)	(38)
Net cash used in investing activities	(2,194)	(38)
Cash flows from financing activities
Proceeds from exercise of stock options	158	223
Proceeds from convertible promissory notes	29,374	31,470
Proceeds from business combination placed in escrow and restricted	39,032	0
Trust proceeds received from recapitalization at closing	582	0
Repurchase of common stock and settlement of forward purchase agreements	(31,303)	0
Transaction costs associated with recapitalization	(10,761)	0
Payments on related party payables	(17)	(242)
Net cash provided by financing activities	27,065	31,451
Net (decrease) increase in cash, cash equivalents, and restricted cash	(259)	28,312
Cash, cash equivalents, and restricted cash, beginning of period	28,695	4,934
Cash, cash equivalents, and restricted cash, end of period	28,436	33,246
Supplemental disclosure of non-cash financing activities
Stockholder contribution for debt issuance costs	924	0
Repurchase of common stock in other accrued expenses	360	0
Conversion of promissory notes into common stock	33,024	0
Issuance of forward share purchase agreements	14,170	0
Issuance of private warrants	3,916	0
Issuance of sponsor shares subject to earnout conditions	6,867	0
Issuance of stockholder earn-out rights	$ 26,131	$ 0

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Description of the Business and Merger Transaction

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of the Business and Merger Transaction

Description of the Business and Merger Transaction

Description of the Business

Leafly Holdings, Inc. (“Leafly” or “the Company”) is a leading online cannabis discovery marketplace and resource for cannabis consumers. Leafly provides an information resource platform with a deep library of content, including detailed information about cannabis strains, retailers and current events. Leafly was incorporated in the state of Delaware on June 20, 2019 and is headquartered in Seattle, Washington.

The Company has two wholly-owned subsidiaries, Leafly Canada Ltd. (“Leafly Canada”) and Leafly, LLC (“Legacy Leafly”). Legacy Leafly is the accounting predecessor of Leafly. The accompanying condensed consolidated financial statements include the financial results of the Company and its wholly-owned subsidiaries.

Merger with Merida

On February 4, 2022, Leafly consummated the previously announced Mergers and related transactions (collectively, the “Merger”) pursuant to the Agreement and Plan of Merger dated August 9, 2021 and amended on September 8, 2021 and on January 11, 2022 (as amended, the “Merger Agreement”). Legacy Leafly (formerly known as Leafly Holdings, Inc.) entered into the Merger Agreement with Merida Merger Corp. I (“Merida”), Merida Merger Sub, Inc., a Washington corporation (“Merger Sub I”), Merida Merger Sub II, LLC, a Washington limited liability company (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”). Merger Sub I merged with and into Legacy Leafly, with Legacy Leafly surviving as a wholly-owned subsidiary of Merida, and following the initial Merger and as part of a single integrated transaction with the initial Merger, Legacy Leafly merged with and into Merger Sub II, with Merger Sub II surviving as a wholly-owned subsidiary of Merida. As a result of these Mergers, Legacy Leafly became a wholly owned subsidiary of Merida and was renamed Leafly, LLC, Merida was renamed Leafly Holdings, Inc. (“New Leafly”), and the securityholders of Legacy Leafly became security holders of Merida. We sometimes refer to the Mergers described above and the other transactions contemplated by the Merger Agreement and the other agreements being entered into by Merida and Legacy Leafly in connection with the Mergers as the “Business Combination” and to Merida following the Business Combination as “New Leafly.”

While the legal acquirer in the Business Combination is Merida, for financial accounting and reporting purposes under U.S. GAAP, Legacy Leafly is the accounting acquirer with the Merger accounted for as a “reverse recapitalization.” A reverse recapitalization does not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of the financial statements of Legacy Leafly. Under this accounting method, Merida is treated as the “acquired” company and Legacy Leafly is the accounting acquirer, with the transaction treated as a recapitalization of Legacy Leafly. Merida’s assets, liabilities and results of operations were consolidated with Legacy Leafly’s beginning on the date of the Business Combination. Except for certain derivative liabilities, the assets and liabilities of Merida were recognized at historical cost (which is consistent with carrying value) and were not material, with no goodwill or other intangible assets recorded. The derivative liabilities, which are discussed in Notes 12 and 13, were recorded at fair value. The consolidated assets, liabilities, and results of operations of Legacy Leafly became the historical financial statements, and operations prior to the closing of the Business Combination presented for comparative purposes are those of Legacy Leafly. Pre-Merger shares of common stock and preferred stock were converted to shares of common stock of the combined company using the conversion ratio of 0.3283 and for comparative purposes, the shares and net loss per share of Legacy Leafly, prior to the Merger, have been retroactively restated using the conversion ratio.

The following table provides a summary of the significant sources and uses of cash related to the closing of the Business Combination on February 4, 2022 and the cash received from escrow through September 30, 2022:

Amount in Merida's trust account ("the Trust") at closing	$	90,824
Total payment to Merida public redeeming stockholders	49,466
Amount available after paying Merida redeeming stockholders	41,358
Cash to escrow for Forward Share Purchase Agreements (see Note 13)	39,032
Remaining balance	2,326
Merida expenses paid from the Trust at closing	1,744
Net cash from the Trust to Leafly at closing	582
Cash received from escrow February 4, 2022 - September 30, 2022	8,089
Net cash from the Trust to Leafly as of September 30, 2022	$	8,671

The following table provides a reconciliation of the common shares related to the Merger transaction:

Merida public stockholders	4,160
Merida initial stockholders (including Sponsor and EarlyBirdCapital)	1,667
Holders of 2022 Notes (see Note 11)	38
Shares held by Sponsor in escrow that are subject to earn-out conditions (see Note 12)	1,625
Total Merida	7,490
Legacy Leafly existing securityholders	35,434
Total shares outstanding as of February 4, 2022	42,924

All shares in this table, except the shares held by Merida public stockholders and Holders of 2022 Notes, were subject to restrictions as to trading through August 3, 2022 ("Lock Up Restrictions").

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Basis of Presentation and Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and should be read in conjunction with the Company's audited consolidated financial statements for the years ended December 31, 2021 and 2020, and Management’s Discussion and Analysis of Financial Condition and Results of Operations of Leafly for the year ended December 31, 2021, each of which was filed on the company’s Amendment No. 1 on Form 8-K/A filed with the SEC on March 31, 2022 (the “2021 Financial Information”).

These condensed consolidated financial statements are unaudited and, in management's opinion, include all adjustments, consisting of normal recurring estimates and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. Actual results may differ from these estimates and assumptions. The results of operations for any interim periods are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting. All intercompany balances and transactions have been eliminated upon consolidation.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported net income (loss).

Seasonality

We may experience seasonality in our business, which we believe has moderate impacts on our overall revenue. In certain years, we've seen seasonal fluctuations that coincide with either federal holidays, generally in the fourth quarter, or industry holidays and events, generally in the spring. Our industry and business history is limited and therefore we can't be certain that these are known trends or that other trends may develop.

Emerging Growth Company Status

Leafly is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued until such time as those standards apply to private companies. The Company has elected to use this extended transition period. In providing this relief, the JOBS Act does not preclude the Company from adopting a new or revised accounting standard earlier than the time that such standard applies to private companies. Leafly will continue to use this relief until the earlier of the date that it (a) is no longer an emerging growth company or (b) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

Significant Accounting Policies

The unaudited interim financial statements should be read in conjunction with the Company's 2021 Financial Information, which describes the Company's significant accounting policies. There have been no material changes to the Company's significant accounting policies during the three and nine months ended September 30, 2022 compared to our Annual Report on Form 10-K for the year ended December 31, 2021. However, certain items became material during the periods presented and therefore, we have disclosed the related accounting policies below. In addition, as a result of the Business Combination, the Company entered into certain derivative instruments that are accounted for as liabilities. These instruments and the related accounting are discussed in Notes 12, 13, and 20.

Capitalized Software

The Company capitalizes certain costs related to acquisition and development of software for internal use, including internal labor costs incurred during development. The Company begins to capitalize these costs when planning and design efforts are successfully completed and development is ready to commence. Costs incurred during planning and design, together with costs incurred for training and maintenance, are expensed as incurred and recorded in product development expense. The Company places capitalized software assets into service and commences amortization when the asset is substantially complete and ready for its intended use. Once placed into service, the Company capitalizes qualifying costs of specified upgrades or enhancements to the assets when the upgrade or enhancement will result in new or additional functionality.

The Company’s estimated useful life for capitalized software is 3 years, and amortization is calculated using the straight-line method. The Company considers the useful life of capitalized software to be a significant estimate.

Transaction Costs

The Company incurred significant costs direct and incremental to the Business Combination and therefore to the recapitalization of the Company. We deferred such costs incurred in 2021. In 2022, upon closing of the Business Combination, total direct transaction costs were allocated between equity and liability instruments measured at fair value on a recurring basis that were newly issued in the recapitalization. Amounts allocated to equity were recorded to additional paid-in capital, while amounts allocated to the specified liabilities were recorded as other expense.

Recent Accounting Pronouncements

As a result of the elected JOBS Act relief discussed above, these condensed consolidated financial statements may not be comparable to other companies that do not elect JOBS Act relief or choose to adopt certain accounting pronouncements during a different period than the Company.

Recently Adopted Accounting Standards

None.

Accounting Pronouncements Issued But Not Yet Adopted

Management does not believe that there are any recently issued, but not yet effective, accounting standards that, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements or related disclosures.

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Cash, Cash Equivalents, and Restricted Cash

9 Months Ended

Sep. 30, 2022

Cash and Cash Equivalents [Abstract]

Cash, Cash Equivalents, and Restricted Cash

Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash consisted of the following:

	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	27,829	$	28,565
Restricted cash	607		130
	$	28,436	$	28,695

The September 30, 2022 restricted cash balance includes $360 of cash maintained in escrow related to Forward Share Purchase Agreements ("FPAs"). Effective August 1, 2022, the FPA holders elected to have Leafly repurchase their remaining 3,081 shares covered by the FPAs for an aggregate repurchase price of $31,663. As a result, the shares repurchased have been removed from Leafly's outstanding shares effective as of the date of purchase and placed into treasury. The FPA holders elected to have all but $360 disbursed from the escrow account and are able to claim the remainder any time until August 1, 2023. If unclaimed, the remaining funds in escrow will be distributed to the Company. Additional information regarding the FPAs is included in Notes 13 and 20.

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Prepaid Expenses and Other Current Assets

9 Months Ended

Sep. 30, 2022

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

	September 30, 2022		December 31, 2021
Prepaid insurance	$	2,065	$	57
Other prepaid expenses	1,441		1,134
Other current assets	63		156
	$	3,569	$	1,347

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Accounts Receivable, Net

9 Months Ended

Sep. 30, 2022

Receivables [Abstract]

Accounts Receivable, Net

Accounts Receivable, Net

Accounts receivable, net consists of amounts due from customers less an allowance for doubtful accounts. The following table presents the allowance for doubtful accounts and the changes therein:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of period	$	1,469	$	1,142	$	1,848	$	1,131
Add: provision for doubtful accounts, net of recoveries	383		529		1,023		841
Less: write-offs	(894)		(93)		(1,913)		(394)
Balance, end of period	$	958	$	1,578	$	958	$	1,578

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Property, Equipment and Software, Net

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Property, Equipment and Software, Net

Property, Equipment, and Software, Net

Property, equipment, and software consisted of the following:

	September 30, 2022		December 31, 2021
Furniture and equipment	$	902	$	1,049
Leasehold improvements	—		2
Internal-use software	2,081		—
	2,983		1,051
Less: accumulated depreciation and amortization	(770)		(738)
	$	2,213	$	313

The Company recognized depreciation expense of $38 and $57 for the three months ended September 30, 2022 and 2021, respectively, and $135 and $195 for the nine months ended September 30, 2022 and 2021, respectively. Amortization of internal-use software was $90 and $0 for the three months ended September 30, 2022 and 2021, respectively, and $141 and $0 for the nine months ended September 30, 2022 and 2021, respectively.

Leases

The Company does not have any leases with an original term longer than twelve months as of September 30, 2022. The Company does rent office space under short-term arrangements, which are not material.

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Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2022

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

Accrued expenses consist of the following:

	September 30, 2022		December 31, 2021
Accrued bonuses	$	537	$	3,668
Other employee-related liabilities	2,547		2,131
Accrued interest	400		1,313
Other accrued expenses 1	1,592		1,213
	$	5,076	$	8,325

1 There are no individual items within this balance that exceed 10% of the total of the table.

Accrued bonuses include those for executive officers of the Company. Historically, bonuses have been provided to executives on a discretionary basis. Bonus compensation is designed to hold executives accountable and reward them for individual and business performance. The Company offers an annual incentive program for its executive officers whereby they are eligible to receive target bonus payouts, of up to 50% for the CEO and 40% for other executive officers, of their base salary, with the actual bonus awarded based on a number of factors, including each executive’s individual performance, Leafly’s performance, current market and business climate, and Leafly’s financial circumstances, as determined by the Leafly board of directors.

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Commitment and Contingencies	9 Months Ended
	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitment and Contingencies	Commitments and ContingenciesIn the normal course of business, the Company may receive inquiries or become involved in legal disputes regarding various litigation matters. In the opinion of management, any potential liabilities resulting from such claims would not have a material adverse effect on the Company’s condensed consolidated financial statements.

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Revenue and Contract Balances

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue and Contract Balances

Revenue and Contract Balances

The following table presents the Company's revenue by service type:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Advertising	$	11,731	$	10,840	$	34,959	$	30,813
Other services	50		56		292		146
	$	11,781	$	10,896	$	35,251	$	30,959

The following table presents the Company's revenue by geographic region:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
United States1	$	11,140	$	9,757	$	32,787	$	27,644
All other countries1	641		1,139		2,464		3,315
	$	11,781	$	10,896	$	35,251	$	30,959

1 Calculated based on customer sold to address for the periods presented. Using the prior calculation based on billing entity address, revenue for the United States and All other countries would have been $11,335 and $446 for the three months ended September 30, 2022, $10,041 and $855 for the three months ended September 30, 2021, $33,491 and $1,760 for the nine months ended September 30, 2022, and $28,204 and $2,755 for the nine months ended September 30, 2021, respectively.

The following tables presents the Company's revenue by state:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Arizona	19	%	16	%	18	%	16	%
California	13	%	11	%	11	%	10	%
Oregon	10	%	11	%	10	%	12	%

No other state comprised 10% or more of Leafly’s revenue during the three and nine months ended September 30, 2022 and 2021. We have a diversified set of customers; no single customer accounted for 10% or more of our revenue for the three and nine months ended September 30, 2022 and 2021.

The following table presents the Company's revenue by timing of recognition:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Over time
Retail1	$	9,042	$	8,606	$	27,286	$	24,572
Brands2	1,759		1,581		5,067		4,591
	$	10,801	$	10,187	$	32,353	$	29,163
Point in time
Brands3	980		709		2,898		1,796
	$	11,781	$	10,896	$	35,251	$	30,959

1 Revenues from subscription services and display ads.

2 Revenues from brand profile subscriptions and digital media (including display ads and audience extension).

3 Revenues from branded content and channel advertising (including direct to consumer email).

Revenues recognized over time are associated with software subscriptions, display ads and audience extension. Revenues recognized at a point in time are associated with branded content and channel advertising. There are no material variations in delivery and revenue recognition periods within the over time category.

Contract liabilities consist of deferred revenue, which is recorded on the Consolidated Balance Sheets when the Company has received consideration, or has the right to receive consideration, in advance of transferring the performance obligations under the contract to the customer.

The following table presents the Company's deferred revenue accounts and changes in the deferred revenue accounts

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of period	$	2,467	$	2,079	$	1,975	$	1,585
Add: net increase in current period contract liabilities	1,630		1,947		1,976		2,112
Less: revenue recognized from beginning balance	(2,045)		(1,847)		(1,899)		(1,518)
Balance, end of period	$	2,052	$	2,179	$	2,052	$	2,179

A majority of the deferred revenue balance as of September 30, 2022 is expected to be recognized in the subsequent 12-month period. No other contract assets or liabilities are recorded on the Company’s Consolidated Balance Sheets as of September 30, 2022 or December 31, 2021.

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Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s effective tax rate was 0% for the three and nine months ended September 30, 2022 and 2021. The effective tax rate was lower than the U.S. federal statutory rate of 21% due to the Company’s full valuation allowance recorded against its deferred tax assets.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has been subject to income tax examinations by major taxing authorities since inception.

As a result of the Business Combination, the Company’s federal, state, and foreign net operating loss carryforwards were $53,904, $35,976 and $4,303, respectively, as of December 31, 2021. Federal and state tax laws impose substantial restrictions on the utilization of net operating loss carryforwards in the event of an "ownership change" as defined in Section 382 of the Internal Revenue code. Such a limitation could result in limitation in the use of the net operating losses in future years and possibly a reduction of the net operating losses available.

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Convertible Promissory Notes

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Convertible Promissory Notes

Convertible Promissory Notes

2022 Notes

Merida entered into a $30,000 convertible note purchase agreement in January 2022, which Legacy Leafly subsequently guaranteed and joined as a party to the agreement on February 4, 2022 in connection with the Business Combination (the “2022 Notes”). Accordingly, post-Business Combination, the 2022 Notes are presented as a liability on Leafly's balance sheet, net of debt issuance costs and debt discount. The Company recognized debt issuance costs of $714 paid in cash, and a debt discount of $924 paid in shares transferred by the Sponsor to the holders of the 2022 Notes upon issuance. The 2022 Notes bear interest at 8% annually, paid in cash semi-annually in arrears on July 31 and January 31 of each year, and mature on January 31, 2025.

The 2022 Notes are unsecured convertible senior notes due 2025. They are convertible at the option of the holders at any time before maturity at an initial conversion share price of $12.50. In addition, the Company may, at its election, force the conversion of the 2022 Notes on or after January 31, 2024, if the volume-weighted average trading price of the Company’s common stock exceeds $18.00 for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days. The Company also has the option, on or after January 31, 2023 and prior to the 40th trading day immediately before the maturity date and subject to the holders’ ability to optionally convert, to redeem all or a portion of the 2022 Notes at a cash redemption price equal to 100% of the principal amount of the 2022 Notes, plus accrued and unpaid interest, if any. The holders of the 2022 Notes have the right to cause the Company to repurchase for cash all or a portion of the 2022 Notes held by such holder upon the occurrence of a “fundamental change” (as defined) or in connection with certain asset sales, in each case at a price equal to 100% of par plus accrued and unpaid interest, if any.

As of September 30, 2022, the net carrying amount of the 2022 Notes was $28,726, which includes unamortized issuance costs and debt discount of $1,274. The estimated fair value of the convertible debt instruments was approximately $23,000 as of September 30, 2022. The fair value was measured using a combination of an income approach and Black-Scholes model, both of which are considered Level 3 inputs in the fair value hierarchy.

2021 Notes

Legacy Leafly issued a series of convertible promissory notes in June 2021 totaling approximately $23,970. In August 2021, Legacy Leafly issued additional convertible promissory notes totaling $7,500 to Merida Capital, an affiliate of Merida. (Both note issuances are collectively referred to below as the “2021 Notes”).

The 2021 Notes bore interest at 8% annually and were considered traditional convertible debt with the entire amount recognized as a liability (with no amount allocated to equity), reduced for direct issuance costs, with initial and subsequent recognition at amortized cost in accordance with the interest method. Unless converted, the entire balance of principal and accrued but unpaid interest was due on December 3, 2022. The 2021 Notes were contingently convertible upon the occurrence of certain events, to include a qualified financing, a non-qualified financing, or in a qualified public transaction.

On February 4, 2022, in connection with the Business Combination, the 2021 Notes were converted to approximately 4,128 shares of Leafly common stock at the conversion price of approximately $2.63, which was 80% of the implied price per share of common stock in the Business Combination. Upon closing of the Business Combination, the shares of common

stock then converted to shares of common stock of the combined company using the conversion ratio of 0.3283, which was used for conversion of all Leafy securities.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

The Consolidated Statements of Changes in Stockholders' Equity (Deficit) reflect the reverse recapitalization on February 4, 2022, as discussed in Note 1. Since the Company was determined to be the accounting acquirer in the transaction, all periods presented prior to consummation of the transaction reflect the historical activity and balances of Leafly, Inc. (other than common and preferred stock and potentially issuable shares underlying stock options and convertible promissory notes, which have been retroactively restated).

Common Stock

On February 4, 2022, the Business Combination was consummated pursuant to the Merger Agreement. Prior to the Business Combination, Legacy Leafly's capital stock consisted of Series A preferred stock and common stock. Upon the consummation of the Business Combination, all issued and outstanding shares of Series A preferred stock converted to shares of nonredeemable common stock.

As of September 30, 2022 Leafly's authorized capital stock consisted of:

•200,000 shares of Leafly common stock, $0.0001 par value per share; and

•5,000 shares of Leafly preferred stock, $0.0001 par value per share.

Voting Rights

The holders of Leafly common stock exclusively possess all stockholder voting power with respect to Leafly, except as otherwise required by law or the Company's charter. Holders of Leafly common stock are entitled to one vote per share on each matter properly submitted to a vote of stockholders. The holders of Leafly common stock will at all times vote together as one class on all matters submitted to a vote of stockholders, unless otherwise required by Delaware law or the charter. If Leafly has multiple classes of common stock in the future, then Delaware law could require holders of shares of a class of capital stock to vote separately as a single class in the following circumstances:

•if we were to seek to amend the charter to increase or decrease the par value of a class of the capital stock, then that class would be required to vote separately to approve the proposed amendment; and

•if we were to seek to amend the charter in a manner that alters or changes the powers, preferences, or special rights of a class of capital stock in a manner that affected its holders adversely, then that class would be required to vote separately to approve the proposed amendment.

Election of Directors

The charter provides for a classified board of directors that is divided into three classes with staggered three-year terms. Only the directors in one class are subject to election by a plurality of the votes cast at each annual meeting of stockholders, with the directors in the other classes continuing for the remainder of their respective three-year terms. The charter does not provide for cumulative voting for the election of directors.

Dividend Rights

Subject to the rights, if any, of the holders of any outstanding series of the Leafly preferred stock, the holders of Leafly common stock are entitled to receive dividends and other distributions (payable in cash, property or capital stock of Leafly) when, as and if declared by the Leafly board of directors out of any assets or funds legally available and will share equally on a per share basis in such dividends and distributions.

No Preemptive or Similar Rights

Leafly common stock is not entitled to preemptive rights, and is not subject to conversion, redemption or sinking fund provisions.

Liquidation, Dissolution and Winding Up

In the event of any voluntary or involuntary liquidation, dissolution or winding-up, after payment or provision for payment of the debts and other liabilities of Leafly, the holders of Leafly common stock will be entitled to receive all the remaining

assets of Leafly available for distribution to its stockholders, ratably in proportion to the number of shares of the Leafly common stock held by them, subject to the rights, if any, of the holders of any outstanding shares of Leafly preferred stock.

Sponsor Shares Subject to Earn-Out Conditions

In accordance with the Merger Agreement, upon closing of the Business Combination, 1,625 of the shares held by the Sponsor were placed in escrow and subjected to earn-out conditions ("Escrow Shares"). Of these Escrow Shares, 50% will be released from escrow if and when the Company's common stock trades at or above $13.50 at any time during the two-year period following closing, and the remaining 50% will be released from escrow if and when the Company's common stock trades at or above $15.50 at any time during the three-year period following closing. In addition, all 1,625 Escrow Shares will be released upon a change in control.

We account for the Escrow Shares as derivative liabilities, remeasured to fair value on a recurring basis, with changes in fair value recorded to earnings. See Note 20 for additional information.

Lock Up Restrictions

In accordance with various legal documents, the majority of our Common Stock was subject to restrictions on trading through August 3, 2022. See Note 1 for detail on Common Stock previously subject to Lock Up Restrictions.

Treasury Stock

Effective August 1, 2022, the Company repurchased 3,081 shares of its common stock at a weighted-average price of $10.28 per share for a total of $31,663, with $31,303 paid with restricted cash and $360 remaining in accrued expenses and other current liabilities on our consolidated balance sheet at September 30, 2022. These repurchases were in settlement of the Forward Purchase Agreements. See Notes 3 and 13 for additional information.

Stockholder Earn-Out Rights

Leafly stockholders, as of immediately prior to the closing of the Business Combination, were granted upon closing of the Business Combination, contingent rights to receive up to 5,429 shares of common stock (the "Rights") if the Company achieves certain earn-out conditions prior to the third anniversary of the Business Combination. We will account for the Rights as derivative liabilities, which we will remeasure to their current fair value as of the end of each reporting period, with changes in the fair value recorded to earnings. See Note 20 for additional information.

The Rights will be earned and shares of common stock will be issued as follows:

First Tranche

Up to 2,715 shares will be issued if and when:

•revenue for the year ending December 31, 2022 equals or exceeds $65,000 (first revenue target), or

•the date on which the volume-weighted average price of common stock for a period of at least 20 days out of 30 consecutive trading days ending on the trading day immediately prior to the date of determination is greater than or equal to $13.50 during the two-year period beginning on the trading day after the closing date of the Merger (as adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to shares of common stock occurring at or after the Closing), or

•a change of control occurs within the two years after the closing date of the Business Combination at the first target price or higher, or

•a pro rata portion of 2,715 shares (50%) if the revenue during the target period meets or exceeds 90% of the first revenue target.

Second Tranche

Up to 2,715 shares will be issued if and when:

•revenue for the year ending December 31, 2023 equals or exceeds $101,000 (second revenue target), or

•the date on which the volume-weighted average price of common stock for a period of at least 20 days out of 30 consecutive trading days ending on the trading day immediately prior to the date of determination is greater than or equal to $15.50 during the three-year period beginning on the trading day after the closing date of the Merger

(as adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to shares of common stock occurring at or after the Closing), or

•a change of control occurs within the three years after the closing date of the Business Combination at the second target price or higher, or

•a pro rata portion of 2,715 (50%) if the revenue during the second target period meets or exceeds 90% of the second revenue target.

If the second revenue or price target is met in full, the respective first target will be deemed to have been met as well if it had not been met during the first period.

Preferred Stock

The Leafly board of directors is authorized, subject to limitations prescribed by the law of the State of Delaware, to issue Leafly preferred stock from time to time in one or more series. The Leafly board of directors is authorized to establish the number of shares to be included in each such series and to fix the voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The Leafly board of directors is able, without stockholder approval, to issue Leafly preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the Leafly common stock and could have anti-takeover effects. The ability of the Leafly board of directors to issue Leafly preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of Leafly or the removal of existing management. Leafly did not have any issued and outstanding shares of preferred stock as of September 30, 2022.

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Warrants and Forward Purchase Share Agreements

9 Months Ended

Sep. 30, 2022

Other Liabilities Disclosure [Abstract]

Warrants and Forward Purchase Share Agreements

Warrants and Forward Share Purchase Agreements

Public Warrants

As of both September 30, 2022 and December 31, 2021, there were 6,501 warrants outstanding that had been included in the units issued in Merida’s initial public offering (the "Public Warrants"). Each Public Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a merger or (b) 12 months from the closing of the IPO. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock.

Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of a merger, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a merger or earlier upon redemption or liquidation.

Once the warrants become exercisable, the Company may redeem the Public Warrants:

•in whole and not in part;

•at a price of $0.01 per warrant;

•upon not less than 30 days’ prior written notice of redemption;

•if, and only if, the reported last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to the warrant holders; and

•If, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

Private Warrants

As of both September 30, 2022 and December 31, 2021, there were 3,950 warrants outstanding that Merida had sold to the Sponsor and EarlyBirdCapital in a private placement that took place simultaneously with Merida’s initial public offering ("the Private Warrants"). The Private Warrants are identical to the Public Warrants, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants were not transferable, assignable or salable until after the completion of the Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants.

We account for the Private Warrants as derivative liabilities, remeasured to fair value on a recurring basis, with changes in the fair value recorded to earnings. See Note 20 for additional information.

Forward Share Purchase Agreements

In December 2021 and January 2022, the Company entered into four separate FPAs with certain investors. The FPAs allowed the investors to sell and transfer common stock held by the investors, not to exceed a total of 4,000 shares in aggregate, to the Company in exchange for cash. The price to be paid by the Company was initially $10.16 per share for up to 2,600 shares and $10.01 per share for up to 1,400 shares. As required by the FPAs, $39,032 of cash was placed into escrow upon closing of the Business Combination, to be used for the share purchases. If the FPAs were not exercised by the holders within their terms of three months post-Business Combination closing, the associated funds were to be released from escrow to the Company. We account for the FPAs as derivative liabilities, remeasured to fair value on a recurring basis, with changes in the fair value recorded to earnings.

On May 3, 2022, Leafly and the holders entered into amendments to the FPAs (the “Amended FPAs”). The Amended FPAs modified the price at which the applicable holder has the right, but not the obligation, to have Leafly repurchase certain shares held by the applicable holder as of the closing of the Business Combination and not later sold into the market to a price of $10.16 per share (with respect to 686 of the shares subject to the Amended FPAs) and $10.31 per share (with respect to 2,404 of the shares subject to the Amended FPAs). The Amended FPAs also modified the date by which such holders may elect to have Leafly repurchase their shares to August 1, 2022. In connection with the Amended FPAs, certain amendments were also made to the escrow agreements in respect to the escrow accounts.

During the three and nine months ended September 30, 2022, $720 and $8,089, respectively, was released from the escrow accounts due to the FPA holders selling shares in the open market, which was accordingly reclassified on the Company's balance sheet from restricted cash to cash.

Effective August 1, 2022, the FPA holders elected to have Leafly repurchase their remaining 3,081 shares covered by the FPAs for an aggregate repurchase price of $31,663. As a result, the shares repurchased have been removed from Leafly's outstanding shares effective as of the date of purchase and placed into treasury. The FPA holders elected to have all but $360 disbursed from the escrow account and are able to claim the remainder any time until August 1, 2023. If unclaimed, the remaining funds in escrow will be distributed to the Company. Also, in connection with the settlement, 25 shares held by Merida Holdings, LLC were canceled, according to an agreement between the Company and Merida Holdings, LLC entered into upon execution of the FPAs.

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Equity Incentive Plans

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plans

Equity Incentive PlansThe Company currently has four equity plans: the New Leafly 2021 Equity Incentive Plan (the “2021 Plan”), the Legacy Leafly 2018 Equity Incentive Plan (the “2018 Plan”), the New Leafy Earn Out Plan (“Earn Out Plan”), and the New Leafly 2021 Employee Stock Purchase Plan (the “ESPP”), which are discussed in this Note 14 and in Note 15. Awards under the

2021 Plan are detailed below. There were no options or other equity awards granted under the 2018 Plan during the three and nine months ended September 30, 2022.

2021 Plan

The 2021 Plan became effective immediately upon closing of the Business Combination. Pursuant to the 2021 Plan, 4,502 shares of common stock were initially reserved for issuance. During the term of the 2021 Plan, the number of shares of common stock thereunder automatically increases on each January 1, commencing on January 1, 2023, and ending on (and including) January 1, 2031, by the lesser of (i) 10% of the fully diluted shares of common stock as of the last day of the preceding fiscal year and (ii) 4,502 shares (adjusted pursuant to the terms of the 2021 Plan).

In August 2022, the Company’s compensation committee of the board of directors or an authorized executive of the Company granted stock options to purchase an aggregate of approximately 101 shares of common stock at an exercise price of $1.98 per share and granted 1,228 restricted stock units. Prior to such grants, no grants had been made under the 2021 Plan. See Note 21 for awards subsequent to September 30, 2022.

The fair value of each stock option award to employees is estimated on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used as inputs to the pricing model for options granted during the three and nine months ended September 30, 2022:

Risk-free interest rate	4.1	%
Expected term in years	4.06
Expected volatility	74.6	%
Expected dividend yield	0.0	%

Stock option activity under the 2021 Plan for the three months ended September 30, 2022 (there were no stock options granted previously under this plan) was as follows:

	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Outstanding at June 30, 2022	—	$	—	$	—	—
Granted	101	1.98
Exercised	—	—
Forfeited or expired	—	—
Outstanding at September 30, 2022	101	$	1.98	$	—	9.89
Vested and exercisable	—	$	—	$	—	—

As of September 30, 2022, there was $114 of total unrecognized compensation cost related to stock options granted under the 2021 Plan. That cost is expected to be recognized over a weighted-average period of 3.36 years. The weighted-average grant date fair value of options granted under the 2021 Plan for the three and nine months ended September 30, 2022 was $1.16 per share.

Restricted stock unit activity under the 2021 Plan for the three months ended September 30, 2022 (there were no restricted stock units granted previously under this plan) was as follows:

	Number of Shares	Weighted Average Grant Date Fair Value		Total Fair Value
Unvested at June 30, 2022	—	$	—
Granted	1,228	1.98		$	2,432
Vested	(173)	1.98		$	325
Forfeited	(65)	1.98
Unvested at September 30, 2022	990	$	1.98

As of September 30, 2022, there was $1,825 of total unrecognized compensation cost related to unvested restricted stock units granted under the 2021 Plan. That cost is expected to be recognized over a weighted-average period of 3.34 years.

2018 Plan

The 2018 Plan became effective on April 17, 2018. The 2018 Plan terminated upon closing of the Business Combination in 2022, but then outstanding options under the 2018 Plan remain outstanding pursuant to their terms, with adjustments to the number of shares and exercise prices to reflect the terms of the Business Combination.

In May 2021, the Company’s board of directors granted stock options under the 2018 Plan to purchase an aggregate of approximately 2,191 shares of common stock at an exercise price of $1.10 per share.

The fair value of each stock option award to employees is estimated on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used as inputs to the pricing model for options granted during the nine months ended September 30, 2021 (there were no grants made in 2022):

Risk-free interest rate	1.0	%
Expected term in years	5.90
Expected volatility	61.2	%
Expected dividend yield	0.0	%

Stock option activity under the 2018 Plan for the quarterly periods ended September 30, 2022 was as follows:

	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2022	3,851	$	1.77
Exercised	(114)	1.12
Forfeited or expired	(56)	1.08
Outstanding at March 31, 2022	3,681	$	1.78	$	23,918	8.62
Exercised	(29)	$	1.05
Forfeited or expired	(3)	$	2.30
Outstanding at June 30, 2022	3,649	$	1.78	$	11,307	8.35
Exercised	(5)	0.79
Forfeited or expired	(110)	7.75
Outstanding at September 30, 2022 1	3,534	$	1.60	$	84	8.29
Vested and exercisable	1,849	$	1.18	$	82	7.80

1 Includes 2,478, 0, and 1,056 of awards accounted for as service-based, performance-based, and market-based options, respectively, that are vested, that the Company currently deems probable of vesting, or in the case of market-based options, that the Company is expensing so long as the respective service conditions are met. The performance options vest only if gross revenue equals or exceeds certain thresholds for the years ending December 31, 2022 and 2023, while the market-based options will vest only if the price of the Company's common stock reaches a $1,000,000 market capitalization target for any 20 days during a 30-day period on or before the fourth anniversary of the closing of the Merger.

As of September 30, 2022, there was: (i) $1,219 of unrecognized compensation cost related to service-based awards, which is expected to be recognized over a weighted-average service period of approximately 2.13 years; and (ii) $1,687 of unrecognized compensation cost related to market-based awards, which is expected to be recognized over a weighted-average service period of approximately 1.55 years.

The following tables presents the classification of stock-based compensation expense under the 2018 Plan and the 2021 Plan:

	Three Months Ended September 30, 2022				Nine Months Ended September 30,
	2022		2021		2022		2021
Sales and marketing	$	77	$	15	$	137	$	65
Product development	86		14		123		126
General and administrative	608		179		2,899		538
	$	771	$	208	$	3,159	$	729

Earn Out Plan

The Earn Out Plan became effective immediately upon closing of the Business Combination. Pursuant to the Earn Out Plan, approximately 571 shares of common stock have been reserved for issuance to employees and certain other eligible parties in the form of restricted stock units (“RSUs”). These RSUs will vest if the Company achieves certain thresholds prior to the third anniversary of the Merger. No RSUs have been awarded under the Earn Out Plan as of September 30, 2022.

Option Modification

Concurrent with the closing of the Business Combination, the vesting provisions of certain stock options previously granted in 2021 to our Chief Executive Officer to purchase 2,917 shares of common stock were modified, and a corresponding charge of $1,366 was recorded for the three months ended March 31, 2022 to general and administrative expenses and additional paid-in capital. The original award included the following vesting provisions:

•Liquidity Event Option: A stock option to purchase 1,458 shares of common stock will vest upon the earlier of (a) the closing of the Initial Public Offering of the Company's common stock or (b) a change in control, provided the recipient remains in continuous service.

•Milestone Option: A stock option to purchase 1,458 shares of common stock will vest one-third each upon the achievement of the three annual revenue targets of $75,000, $150,000 and $300,000, provided the recipient remains in continuous service.

The modified vesting provisions are as follows:

•Liquidity Event Option: A stock option to purchase 1,458 shares of common stock will vest as follows, provided the recipient remains in continuous service: 50% upon the closing of the Business Combination and 50% upon the earlier of (i) the Company's achievement of a $1,000,000 market capitalization for any 20 during a 30-day period on or before the fourth anniversary of the closing of the Business Combination (the "Market Cap Milestone") or (ii) a change in control.

•Milestone Option: A stock option to purchase 1,458 shares of common stock will vest upon the achievement of the following milestones, provided that the recipient remains in continuous service:

◦First Milestone: 50% of the total number of shares subject to the stock option will vest if the Company's gross revenue for the year ending December 31, 2022 equals or exceeds $65,000. A pro rata amount vests in the event that the Company's gross revenue equals or exceeds 90% of the revenue target.

◦Second Milestone: 50% of the total number of shares subject to the stock option will vest if the Company's gross revenue for the year ending December 31, 2023 equals or exceeds $101,000. A pro rata amount vests in the event that the Company's gross revenue equals or exceeds 90% of the revenue target.

◦In the event the Second Milestone is achieved, any unvested portion of the stock option subject to the First Milestone will fully vest.

◦In the event the Market Cap Milestone is achieved, any unvested portion of the Milestone Option will fully vest.

◦The date of vesting for the Milestone Option will be the earlier of (i) the date following the Company's filing with the SEC of its Form 10-K for the applicable fiscal year in which the applicable revenue target was attained or, (ii) the date of the Market Cap Milestone is achieved.

◦All shares subject to the Milestone Option will vest immediately upon a change in control.

◦The Milestone Option will remain outstanding unless and until the last possible time that the Second Milestone can be achieved, the Market Cap Milestone can be achieved, or a change in control may occur during the term of the Milestone Option award, subject to the recipient's continued service.

Employee Stock Purchase PlanThe 2021 Employee Stock Purchase Plan (the “ESPP”) became effective immediately upon closing of the Merger. Pursuant to the ESPP, 1,126 shares of common stock are initially reserved for issuance. During the term of the ESPP, the number of shares of common stock thereunder automatically increases on each January 1, commencing on January 1, 2023 and ending on (and including) January 1, 2031, by the lesser of (i) 2.5% of the fully diluted shares of common stock as of the last day of the preceding fiscal year and (ii) 1,126 shares (as adjusted pursuant to the terms of the ESPP). The Company's current offering period runs from September 16, 2022 through March 15, 2023. Certain employees have enrolled but no purchases had been made as of September 30, 2022.

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Employee Stock Purchase Plan

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Employee Stock Purchase Plan

Equity Incentive PlansThe Company currently has four equity plans: the New Leafly 2021 Equity Incentive Plan (the “2021 Plan”), the Legacy Leafly 2018 Equity Incentive Plan (the “2018 Plan”), the New Leafy Earn Out Plan (“Earn Out Plan”), and the New Leafly 2021 Employee Stock Purchase Plan (the “ESPP”), which are discussed in this Note 14 and in Note 15. Awards under the

2021 Plan are detailed below. There were no options or other equity awards granted under the 2018 Plan during the three and nine months ended September 30, 2022.

2021 Plan

The 2021 Plan became effective immediately upon closing of the Business Combination. Pursuant to the 2021 Plan, 4,502 shares of common stock were initially reserved for issuance. During the term of the 2021 Plan, the number of shares of common stock thereunder automatically increases on each January 1, commencing on January 1, 2023, and ending on (and including) January 1, 2031, by the lesser of (i) 10% of the fully diluted shares of common stock as of the last day of the preceding fiscal year and (ii) 4,502 shares (adjusted pursuant to the terms of the 2021 Plan).

In August 2022, the Company’s compensation committee of the board of directors or an authorized executive of the Company granted stock options to purchase an aggregate of approximately 101 shares of common stock at an exercise price of $1.98 per share and granted 1,228 restricted stock units. Prior to such grants, no grants had been made under the 2021 Plan. See Note 21 for awards subsequent to September 30, 2022.

The fair value of each stock option award to employees is estimated on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used as inputs to the pricing model for options granted during the three and nine months ended September 30, 2022:

Risk-free interest rate	4.1	%
Expected term in years	4.06
Expected volatility	74.6	%
Expected dividend yield	0.0	%

Stock option activity under the 2021 Plan for the three months ended September 30, 2022 (there were no stock options granted previously under this plan) was as follows:

	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Outstanding at June 30, 2022	—	$	—	$	—	—
Granted	101	1.98
Exercised	—	—
Forfeited or expired	—	—
Outstanding at September 30, 2022	101	$	1.98	$	—	9.89
Vested and exercisable	—	$	—	$	—	—

As of September 30, 2022, there was $114 of total unrecognized compensation cost related to stock options granted under the 2021 Plan. That cost is expected to be recognized over a weighted-average period of 3.36 years. The weighted-average grant date fair value of options granted under the 2021 Plan for the three and nine months ended September 30, 2022 was $1.16 per share.

Restricted stock unit activity under the 2021 Plan for the three months ended September 30, 2022 (there were no restricted stock units granted previously under this plan) was as follows:

	Number of Shares	Weighted Average Grant Date Fair Value		Total Fair Value
Unvested at June 30, 2022	—	$	—
Granted	1,228	1.98		$	2,432
Vested	(173)	1.98		$	325
Forfeited	(65)	1.98
Unvested at September 30, 2022	990	$	1.98

As of September 30, 2022, there was $1,825 of total unrecognized compensation cost related to unvested restricted stock units granted under the 2021 Plan. That cost is expected to be recognized over a weighted-average period of 3.34 years.

2018 Plan

The 2018 Plan became effective on April 17, 2018. The 2018 Plan terminated upon closing of the Business Combination in 2022, but then outstanding options under the 2018 Plan remain outstanding pursuant to their terms, with adjustments to the number of shares and exercise prices to reflect the terms of the Business Combination.

In May 2021, the Company’s board of directors granted stock options under the 2018 Plan to purchase an aggregate of approximately 2,191 shares of common stock at an exercise price of $1.10 per share.

The fair value of each stock option award to employees is estimated on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used as inputs to the pricing model for options granted during the nine months ended September 30, 2021 (there were no grants made in 2022):

Risk-free interest rate	1.0	%
Expected term in years	5.90
Expected volatility	61.2	%
Expected dividend yield	0.0	%

Stock option activity under the 2018 Plan for the quarterly periods ended September 30, 2022 was as follows:

	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2022	3,851	$	1.77
Exercised	(114)	1.12
Forfeited or expired	(56)	1.08
Outstanding at March 31, 2022	3,681	$	1.78	$	23,918	8.62
Exercised	(29)	$	1.05
Forfeited or expired	(3)	$	2.30
Outstanding at June 30, 2022	3,649	$	1.78	$	11,307	8.35
Exercised	(5)	0.79
Forfeited or expired	(110)	7.75
Outstanding at September 30, 2022 1	3,534	$	1.60	$	84	8.29
Vested and exercisable	1,849	$	1.18	$	82	7.80

1 Includes 2,478, 0, and 1,056 of awards accounted for as service-based, performance-based, and market-based options, respectively, that are vested, that the Company currently deems probable of vesting, or in the case of market-based options, that the Company is expensing so long as the respective service conditions are met. The performance options vest only if gross revenue equals or exceeds certain thresholds for the years ending December 31, 2022 and 2023, while the market-based options will vest only if the price of the Company's common stock reaches a $1,000,000 market capitalization target for any 20 days during a 30-day period on or before the fourth anniversary of the closing of the Merger.

As of September 30, 2022, there was: (i) $1,219 of unrecognized compensation cost related to service-based awards, which is expected to be recognized over a weighted-average service period of approximately 2.13 years; and (ii) $1,687 of unrecognized compensation cost related to market-based awards, which is expected to be recognized over a weighted-average service period of approximately 1.55 years.

The following tables presents the classification of stock-based compensation expense under the 2018 Plan and the 2021 Plan:

	Three Months Ended September 30, 2022				Nine Months Ended September 30,
	2022		2021		2022		2021
Sales and marketing	$	77	$	15	$	137	$	65
Product development	86		14		123		126
General and administrative	608		179		2,899		538
	$	771	$	208	$	3,159	$	729

Earn Out Plan

The Earn Out Plan became effective immediately upon closing of the Business Combination. Pursuant to the Earn Out Plan, approximately 571 shares of common stock have been reserved for issuance to employees and certain other eligible parties in the form of restricted stock units (“RSUs”). These RSUs will vest if the Company achieves certain thresholds prior to the third anniversary of the Merger. No RSUs have been awarded under the Earn Out Plan as of September 30, 2022.

Option Modification

Concurrent with the closing of the Business Combination, the vesting provisions of certain stock options previously granted in 2021 to our Chief Executive Officer to purchase 2,917 shares of common stock were modified, and a corresponding charge of $1,366 was recorded for the three months ended March 31, 2022 to general and administrative expenses and additional paid-in capital. The original award included the following vesting provisions:

•Liquidity Event Option: A stock option to purchase 1,458 shares of common stock will vest upon the earlier of (a) the closing of the Initial Public Offering of the Company's common stock or (b) a change in control, provided the recipient remains in continuous service.

•Milestone Option: A stock option to purchase 1,458 shares of common stock will vest one-third each upon the achievement of the three annual revenue targets of $75,000, $150,000 and $300,000, provided the recipient remains in continuous service.

The modified vesting provisions are as follows:

•Liquidity Event Option: A stock option to purchase 1,458 shares of common stock will vest as follows, provided the recipient remains in continuous service: 50% upon the closing of the Business Combination and 50% upon the earlier of (i) the Company's achievement of a $1,000,000 market capitalization for any 20 during a 30-day period on or before the fourth anniversary of the closing of the Business Combination (the "Market Cap Milestone") or (ii) a change in control.

•Milestone Option: A stock option to purchase 1,458 shares of common stock will vest upon the achievement of the following milestones, provided that the recipient remains in continuous service:

◦First Milestone: 50% of the total number of shares subject to the stock option will vest if the Company's gross revenue for the year ending December 31, 2022 equals or exceeds $65,000. A pro rata amount vests in the event that the Company's gross revenue equals or exceeds 90% of the revenue target.

◦Second Milestone: 50% of the total number of shares subject to the stock option will vest if the Company's gross revenue for the year ending December 31, 2023 equals or exceeds $101,000. A pro rata amount vests in the event that the Company's gross revenue equals or exceeds 90% of the revenue target.

◦In the event the Second Milestone is achieved, any unvested portion of the stock option subject to the First Milestone will fully vest.

◦In the event the Market Cap Milestone is achieved, any unvested portion of the Milestone Option will fully vest.

◦The date of vesting for the Milestone Option will be the earlier of (i) the date following the Company's filing with the SEC of its Form 10-K for the applicable fiscal year in which the applicable revenue target was attained or, (ii) the date of the Market Cap Milestone is achieved.

◦All shares subject to the Milestone Option will vest immediately upon a change in control.

◦The Milestone Option will remain outstanding unless and until the last possible time that the Second Milestone can be achieved, the Market Cap Milestone can be achieved, or a change in control may occur during the term of the Milestone Option award, subject to the recipient's continued service.

Employee Stock Purchase PlanThe 2021 Employee Stock Purchase Plan (the “ESPP”) became effective immediately upon closing of the Merger. Pursuant to the ESPP, 1,126 shares of common stock are initially reserved for issuance. During the term of the ESPP, the number of shares of common stock thereunder automatically increases on each January 1, commencing on January 1, 2023 and ending on (and including) January 1, 2031, by the lesser of (i) 2.5% of the fully diluted shares of common stock as of the last day of the preceding fiscal year and (ii) 1,126 shares (as adjusted pursuant to the terms of the ESPP). The Company's current offering period runs from September 16, 2022 through March 15, 2023. Certain employees have enrolled but no purchases had been made as of September 30, 2022.

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Related Party Transactions

9 Months Ended

Sep. 30, 2022

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

One of Leafly's significant investors, Brendan Kennedy, is a member of the board of directors of Tilray, Inc., which is the parent company of High Park Holdings Ltd., a customer of Leafly, and has therefore been identified as a related party. During the three months ended September 30, 2022 and 2021, the Company recorded approximately $— and $11, respectively, of revenue earned from contracts with this customer, and during the nine months ended September 30, 2022 and 2021, the Company recorded approximately $— and $125, respectively, of revenue earned from contracts with this customer.

In June 2021, Mr. Kennedy, purchased a convertible promissory note totaling $1,000. The note was issued as part of the existing series of 2021 Notes (see Note 11) and was subject to the same interest rate, maturity, and conversion terms. This note converted to shares of Leafly common stock upon closing of the Business Combination in February 2022, along with the other 2021 Notes.

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Defined Contribution Plan	9 Months Ended
	Sep. 30, 2022
Retirement Benefits [Abstract]
Defined Contribution Plan	Defined Contribution PlanThe Company recognized expense from matching contributions to the Company-sponsored defined contribution retirement (401k) plan of $225 and $159 for the three months ended September 30, 2022 and 2021, respectively, and $684 and $528 for the nine months ended September 30, 2022 and 2021, respectively.

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Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

Net Income (Loss) Per Share

Basic and diluted net income (loss) per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. Under the two-class method, basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Shares repurchased and held in treasury by the Company are removed from the weighted-average number of shares of common stock outstanding as of the date of repurchase.

The Company considers its preferred stock to be participating securities. As of September 30, 2022, the Company had 5,429 outstanding shares of common stock that are in escrow and subject to earn-out conditions and thus forfeiture, which do not meet the criteria for participating securities (see Note 12 — Stockholders' Equity for additional information). Net income (loss) is attributed to common stockholders and participating securities based on their participation rights. Net income (loss) is not attributed to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in any losses.

Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of non-participating shares of common stock that are subject to forfeiture, stock options, preferred stock,

convertible notes, and other securities outstanding. Certain securities are antidilutive and as such, are excluded from the calculation of diluted earnings per share and disclosed separately. Because of the nature of the calculation, particular securities may be dilutive in some periods and anti-dilutive in other periods. The Class 1, 2, and 3 common shares presented below have been retroactively restated for all periods using the conversion ratio in connection with the Business Combination.

The following table presents the computation of basic and diluted net income (loss) per share attributable to common stockholders, as a group, for the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss) (A)	$	15,454	$	(4,454)	$	10,837	$	(6,880)
Income impact of FPAs	(3,939)		—		(346)		—
Income impact of convertible promissory notes	600		—		—		—
Total undistributed income (loss) (B)	12,115		(4,454)		10,491		(6,880)
Weighted average shares outstanding (C)	35,580		24,923		35,260		24,832
Dilutive effect of FPAs	3,547		—		1,140		—
Dilutive effect of convertible promissory notes	2,477		—		—		—
Dilutive effect of stock-based awards	1,611		—		2,304		—
Common stock and common stock equivalents (D)	43,215		24,923		38,704		24,832
Net income (loss) per share:
Basic (A/C)	$	0.43	$	(0.18)	$	0.31	$	(0.28)
Diluted (B/D)	$	0.28	$	(0.18)	$	0.27	$	(0.28)

During 2022, the Class 1, 2, and 3 shares were outstanding from January 1, 2022 through February 3, 2022, while only one class of common stock was outstanding beginning February 4, 2022. During 2021, only the Class 1, 2, and 3 shares were outstanding. Following are the calculations of basic and diluted net income (loss) per share for each class of common stock (refer to the tables above for the impact of common stock equivalents on common shares for the three and nine months ended September 30, 2022):

	Three Months Ended September 30, 2022		Three Months Ended September 30, 2021
	Common		Class 1		Class 2		Class 3
Net income (loss)	$	15,454	$	(1,676)	$	(2,458)	$	(320)
Weighted average shares outstanding	35,580		9,379		13,755		1,789
Common stock and common stock equivalents	43,215		9,379		13,755		1,789
Basic net income (loss) per share	$	0.43	$	(0.18)	$	(0.18)	$	(0.18)
Diluted net income (loss) per share	$	0.28	$	(0.18)	$	(0.18)	$	(0.18)

	Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021
	Common		Class 1		Class 2		Class 3
Net loss	$	10,837	$	(2,598)	$	(3,811)	$	(471)
Weighted average shares outstanding	35,260		9,379		13,755		1,698
Common stock and common stock equivalents	38,704		9,379		13,755		1,698
Basic net income (loss) per share	$	0.31	$	(0.28)	$	(0.28)	$	(0.28)
Diluted net income (loss) per share	$	0.27	$	(0.28)	$	(0.28)	$	(0.28)

The following shares of common stock subject to certain instruments were excluded from the computation of diluted net income per share attributable to common stockholders for the periods presented as their effect would have been antidilutive (with figures recast using the conversion ratio for the Business Combination, as applicable):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Shares subject to warrants	10,451		—		10,451		—
Shares subject to convertible promissory notes	—		12,240		2,428		12,240
Preferred stock	—		6,141		—		6,141
Escrow Shares	1,625		—		1,625		—
Shares subject to outstanding common stock options and RSUs	1,056		3,785		1,056		3,785
Shares subject to stockholder earn-out rights	5,429		—		5,429		—
	$	18,561	$	22,166	$	20,989	$	22,166

See Note 11 for additional information regarding convertible promissory notes, Note 12 for additional information regarding stockholder earn-out rights, preferred stock, and Escrow Shares, Note 13 for additional information regarding warrants, and Note 14 for additional information regarding stock options and RSUs.

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Segment Reporting

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Segment revenue and gross profit were as follows during the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue:
Retail	$	9,042	$	8,606	$	27,286	$	24,572
Brands	2,739		2,290		7,965		6,387
Total revenue	$	11,781	$	10,896	$	35,251	$	30,959
Gross profit:
Retail	7,979		7,744		24,193		22,339
Brands	2,287		1,891		6,647		5,056
Total gross profit	$	10,266	$	9,635	$	30,840	$	27,395

Assets are not allocated to segments for internal reporting presentations, nor are depreciation and amortization.

Geographic Areas

The Company’s operations are primarily in the U.S. and to a lesser extent, in certain other countries. Refer to Note 9 for revenue classified by major geographic area.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company follows the guidance in ASC 820, "Fair Value Measurement," for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1:    Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:    Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3:    Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

The Company’s financial instruments include cash equivalents, restricted cash, accounts receivable from customers, accounts payable and accrued liabilities, all of which are typically short-term in nature. The Company believes that the carrying amounts of these financial instruments reasonably approximate their fair values due to their short-term nature.

The following table presents information about the Company’s derivative liabilities that are measured at fair value on a recurring basis beginning February 4, 2022 (the date of closing of the Business Combination) when the derivative liabilities were assumed, and discloses the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description	Level	Fair Value at September 30, 2022		Fair Value at June 30, 2022		Fair Value at February 4, 2022		Gain (Loss) Three Months Ended September 30, 20221		Gain (Loss) Nine Months Ended September 30, 20221
Private Warrants derivative liability	3	$	662	$	3,693	$	3,916	$	3,031	$	3,254
Forward share purchase agreements derivative liability 2	3	—		17,763		14,170		3,939		346
Escrow Shares derivative liability	3	47		3,481		6,868		3,434		6,821
Stockholder earn-out rights derivative liability	3	288		12,147		26,131		11,859		25,843
Total		$	997	$	37,084	$	51,085	22,264		$	36,264

1 Totals may not foot due to rounding.

2 The forward share purchase agreements were settled effective August 1, 2022, at which time the fair value was $13,824 based on cash settlement.

Assumptions used to determine the fair values are presented in the following sections:

Private Warrants Derivative Liability

The Private Warrants were valued using a Black-Scholes model and the following Level 3 inputs:

	September 30, 2022		June 30, 2022		February 4, 2022
Exercise price	$	11.50	$	11.50	$	11.50
Stock price	$	0.68	$	4.50	$	6.53
Volatility	98.0%		51.6%		34.3%
Term (in years)	4.34		4.59		5.00
Risk-free rate	4.1%		3.0%		1.8%
Dividend yield	0.0%		0.0%		0.0%

The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies and the volatility of the Public Warrants. The term input represents the maximum contractual term, though the Private Warrants may be exercised earlier. The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

Forward Share Purchase Agreements Derivative Liability

The FPAs were valued using a Black-Scholes model and the following Level 3 inputs:

	September 30, 2022	June 30, 2022		February 4, 2022
Exercise price - one agreement	N/A	$	10.31	$	10.16
Exercise price - three agreements	N/A	$	10.16	$	10.01
Stock price	N/A	$	4.50	$	6.53
Volatility	N/A	70.4%		63.9%
Term (in years)	N/A	0.09		0.24
Risk-free rate	N/A	1.3%		0.2%
Dividend yield	N/A	0.0%		0.0%

The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies. The term input represents the maximum contractual term, though the shares underlying the FPAs may be sold by the holders into the open market earlier, which in some cases they have been (see Note 13). The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

Escrow Shares Derivative Liability

The Escrow Shares derivative liability was calculated using a binomial lattice model and the following Level 3 inputs:

	September 30, 2022		June 30, 2022		February 4, 2022
First stock price trigger	$	13.50	$	13.50	$	13.50
Second stock price trigger	$	15.50	$	15.50	$	15.50
Stock price	$	0.68	$	4.50	$	6.53
Volatility	79.0%		68.0%		64.0%
Term (in years)	2.34		2.59		3.00
Risk-free rate	4.2%		3.0%		1.6%
Dividend yield	0.0%		0.0%		0.0%

The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies. The term input represents the maximum contractual term, though the shares may be released from escrow earlier. The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

Stockholder Earn-Out Rights Derivative Liability

The stockholder earn-out rights were valued using a binomial lattice model and the following Level 3 inputs:

	September 30, 2022		June 30, 2022		February 4, 2022
First stock price trigger	$	13.50	$	13.50	$	13.50
Second stock price trigger	$	15.50	$	15.50	$	15.50
First revenue trigger	$	65,000	$	65,000	$	65,000
Second revenue trigger	$	101,000	$	101,000	$	101,000
Stock price	$	0.68	$	4.50	$	6.53
2022 Revenue assumption	$	47,500	$	49,500	$	55,500
Volatility	79.0%		68.0%		64.0%
Term (in years)	2.34		2.59		3.00
Risk-free rate	4.2%		3.0%		1.6%
Dividend yield	0.0%		0.0%		0.0%

The revenue assumption input represents the midpoint of revenue guidance the Company had provided in the respective period. The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies. The term input represents the maximum contractual term, though the stockholder earn-out rights may vest earlier. The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

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Subsequent Events

9 Months Ended

Sep. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Issuance of Restricted Stock Units

On October 6, 2022, the Company awarded 512,203 restricted stock units to employees and members of its board of directors, and 819,721 performance stock units to employees.

Restructuring Plan

On October 18, 2022, the Company committed to a restructuring plan (the “Restructuring Plan”), which is intended to support its strategic plan in an effort to improve operating performance and ensure that the Company is appropriately structured and resourced to deliver sustainable value to its customers and shareholders. Key activities under the Restructuring Plan include a focus on efficiency and cost-saving efforts, which includes decreasing, through attrition and layoffs, total headcount by approximately 56 employees upon the completion of the Restructuring Plan. These activities are expected to be substantially completed by the end of 2022.

The Company currently estimates it will incur cash pre-tax restructuring charges of approximately $500, primarily in the fourth quarter of 2022, as a result of the Restructuring Plan, comprised primarily of one-time severance and other employee-related termination benefits. Estimated amounts are subject to change until finalized.

Nasdaq Notifications of Noncompliance

On October 28, 2022, the Company received a letter from the staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) providing notification that the Company no longer complies with the $50 million in market value of listed securities standard for continued listing on the Nasdaq Global Market under Nasdaq’s Listing Rule 5450(b)(2)(A) and that the Company also does not comply with either of the two alternative standards of Listing Rule 5450(b), the equity standard and the total assets and total revenue standard. On November 2, 2022, Leafly received another letter from the Nasdaq staff providing notification that, for the previous 30 consecutive business days, the bid price for Leafly’s common stock had closed below the $1.00 per share minimum bid price requirement for continued listing under Nasdaq Listing Rule 5450(a)(1). The notices have no immediate effect on the listing of the Company’s common stock or warrants, and its common stock and warrants will continue to trade on The Nasdaq Global Market under the symbol “LFLY” and “LFLYW,” respectively.

The notification of noncompliance has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Global Market. In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has been provided an

initial period of 180 calendar days, or until April 26, 2023, to regain compliance with the minimum bid price requirement. To regain compliance, the market value of the Company’s common stock must be $50 million or more for a minimum of 10 consecutive business days at any time before April 26, 2023 and we must otherwise satisfy the Nasdaq Global Market’s requirements for continued listing. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided an initial period of 180 calendar days, or until May 1, 2023, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company’s common stock must be $1.00 per share or more for a minimum of 10 consecutive business days at any time before May 1, 2023 and we must otherwise satisfy the Nasdaq Global Market’s requirements for continued listing The Company's failure to regain compliance during this period could result in delisting.

If the Company is not able to achieve compliance with an applicable listing standard under Listing Rule 5450(b) prior to April 26, 2023, the Company may be eligible to transfer the listing for its common stock to the Nasdaq Capital Market. To qualify, the Company would be required to meet the continued listing requirements for the Nasdaq Capital Market.

If the Company does not regain compliance with the minimum bid price requirement by May 1, 2023, the Company may be eligible for an additional 180 calendar day compliance period. To qualify, the Company would need to transfer the listing of its common stock to the Nasdaq Capital Market, provided that it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum bid price requirement, and would need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. However, if it appears to the Staff that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, Nasdaq would notify the Company that its securities would be subject to delisting. In the event of such a notification, the Company may appeal the Staff’s determination to delist its securities, but there can be no assurance the Staff would grant the Company’s request for continued listing.

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Basis of Presentation and Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

The interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and should be read in conjunction with the Company's audited consolidated financial statements for the years ended December 31, 2021 and 2020, and Management’s Discussion and Analysis of Financial Condition and Results of Operations of Leafly for the year ended December 31, 2021, each of which was filed on the company’s Amendment No. 1 on Form 8-K/A filed with the SEC on March 31, 2022 (the “2021 Financial Information”).

Use of Estimates

These condensed consolidated financial statements are unaudited and, in management's opinion, include all adjustments, consisting of normal recurring estimates and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. Actual results may differ from these estimates and assumptions.

Consolidation

All intercompany balances and transactions have been eliminated upon consolidation.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported net income (loss).

Capitalized Software

The Company capitalizes certain costs related to acquisition and development of software for internal use, including internal labor costs incurred during development. The Company begins to capitalize these costs when planning and design efforts are successfully completed and development is ready to commence. Costs incurred during planning and design, together with costs incurred for training and maintenance, are expensed as incurred and recorded in product development expense. The Company places capitalized software assets into service and commences amortization when the asset is substantially complete and ready for its intended use. Once placed into service, the Company capitalizes qualifying costs of specified upgrades or enhancements to the assets when the upgrade or enhancement will result in new or additional functionality.The Company’s estimated useful life for capitalized software is 3 years, and amortization is calculated using the straight-line method. The Company considers the useful life of capitalized software to be a significant estimate.

Transaction Costs

The Company incurred significant costs direct and incremental to the Business Combination and therefore to the recapitalization of the Company. We deferred such costs incurred in 2021. In 2022, upon closing of the Business Combination, total direct transaction costs were allocated between equity and liability instruments measured at fair value on a recurring basis that were newly issued in the recapitalization. Amounts allocated to equity were recorded to additional paid-in capital, while amounts allocated to the specified liabilities were recorded as other expense.

Recently Adopted Accounting Standards and Accounting Pronouncements Issued But Not Yet Adopted

Recently Adopted Accounting Standards

None.

Accounting Pronouncements Issued But Not Yet Adopted

Management does not believe that there are any recently issued, but not yet effective, accounting standards that, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements or related disclosures.

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Description of the Business and Merger Transaction (Tables)

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Merger

The following table provides a summary of the significant sources and uses of cash related to the closing of the Business Combination on February 4, 2022 and the cash received from escrow through September 30, 2022:

Amount in Merida's trust account ("the Trust") at closing	$	90,824
Total payment to Merida public redeeming stockholders	49,466
Amount available after paying Merida redeeming stockholders	41,358
Cash to escrow for Forward Share Purchase Agreements (see Note 13)	39,032
Remaining balance	2,326
Merida expenses paid from the Trust at closing	1,744
Net cash from the Trust to Leafly at closing	582
Cash received from escrow February 4, 2022 - September 30, 2022	8,089
Net cash from the Trust to Leafly as of September 30, 2022	$	8,671

The following table provides a reconciliation of the common shares related to the Merger transaction:

Merida public stockholders	4,160
Merida initial stockholders (including Sponsor and EarlyBirdCapital)	1,667
Holders of 2022 Notes (see Note 11)	38
Shares held by Sponsor in escrow that are subject to earn-out conditions (see Note 12)	1,625
Total Merida	7,490
Legacy Leafly existing securityholders	35,434
Total shares outstanding as of February 4, 2022	42,924

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Cash, Cash Equivalents, and Restricted Cash (Tables)

9 Months Ended

Sep. 30, 2022

Cash and Cash Equivalents [Abstract]

Schedule of Cash and Cash Equivalents

Cash, cash equivalents, and restricted cash consisted of the following:

	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	27,829	$	28,565
Restricted cash	607		130
	$	28,436	$	28,695

Schedule of Restricted Cash

Cash, cash equivalents, and restricted cash consisted of the following:

	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	27,829	$	28,565
Restricted cash	607		130
	$	28,436	$	28,695

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Prepaid Expenses and Other Current Assets (Tables)

9 Months Ended

Sep. 30, 2022

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

	September 30, 2022		December 31, 2021
Prepaid insurance	$	2,065	$	57
Other prepaid expenses	1,441		1,134
Other current assets	63		156
	$	3,569	$	1,347

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Accounts Receivable, Net (Tables)

9 Months Ended

Sep. 30, 2022

Receivables [Abstract]

Schedule of Allowance for Doubtful Accounts

The following table presents the allowance for doubtful accounts and the changes therein:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of period	$	1,469	$	1,142	$	1,848	$	1,131
Add: provision for doubtful accounts, net of recoveries	383		529		1,023		841
Less: write-offs	(894)		(93)		(1,913)		(394)
Balance, end of period	$	958	$	1,578	$	958	$	1,578

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Property, Equipment and Software, Net (Tables)

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property, equipment, and software consisted of the following:

	September 30, 2022		December 31, 2021
Furniture and equipment	$	902	$	1,049
Leasehold improvements	—		2
Internal-use software	2,081		—
	2,983		1,051
Less: accumulated depreciation and amortization	(770)		(738)
	$	2,213	$	313

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Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2022

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses consist of the following:

	September 30, 2022		December 31, 2021
Accrued bonuses	$	537	$	3,668
Other employee-related liabilities	2,547		2,131
Accrued interest	400		1,313
Other accrued expenses 1	1,592		1,213
	$	5,076	$	8,325

1 There are no individual items within this balance that exceed 10% of the total of the table.

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Revenue and Contract Balances (Tables)

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table presents the Company's revenue by service type:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Advertising	$	11,731	$	10,840	$	34,959	$	30,813
Other services	50		56		292		146
	$	11,781	$	10,896	$	35,251	$	30,959

The following table presents the Company's revenue by geographic region:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
United States1	$	11,140	$	9,757	$	32,787	$	27,644
All other countries1	641		1,139		2,464		3,315
	$	11,781	$	10,896	$	35,251	$	30,959

1 Calculated based on customer sold to address for the periods presented. Using the prior calculation based on billing entity address, revenue for the United States and All other countries would have been $11,335 and $446 for the three months ended September 30, 2022, $10,041 and $855 for the three months ended September 30, 2021, $33,491 and $1,760 for the nine months ended September 30, 2022, and $28,204 and $2,755 for the nine months ended September 30, 2021, respectively.

The following tables presents the Company's revenue by state:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Arizona	19	%	16	%	18	%	16	%
California	13	%	11	%	11	%	10	%
Oregon	10	%	11	%	10	%	12	%

The following table presents the Company's revenue by timing of recognition:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Over time
Retail1	$	9,042	$	8,606	$	27,286	$	24,572
Brands2	1,759		1,581		5,067		4,591
	$	10,801	$	10,187	$	32,353	$	29,163
Point in time
Brands3	980		709		2,898		1,796
	$	11,781	$	10,896	$	35,251	$	30,959

1 Revenues from subscription services and display ads.

2 Revenues from brand profile subscriptions and digital media (including display ads and audience extension).

3 Revenues from branded content and channel advertising (including direct to consumer email).

Schedule of Deferred Revenue

The following table presents the Company's deferred revenue accounts and changes in the deferred revenue accounts

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of period	$	2,467	$	2,079	$	1,975	$	1,585
Add: net increase in current period contract liabilities	1,630		1,947		1,976		2,112
Less: revenue recognized from beginning balance	(2,045)		(1,847)		(1,899)		(1,518)
Balance, end of period	$	2,052	$	2,179	$	2,052	$	2,179

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Equity Incentive Plans (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of Weighted-Average Assumptions Used in Option Pricing Model

The fair value of each stock option award to employees is estimated on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used as inputs to the pricing model for options granted during the three and nine months ended September 30, 2022:

Risk-free interest rate	4.1	%
Expected term in years	4.06
Expected volatility	74.6	%
Expected dividend yield	0.0	%

The following weighted-average assumptions were used as inputs to the pricing model for options granted during the nine months ended September 30, 2021 (there were no grants made in 2022):

Risk-free interest rate	1.0	%
Expected term in years	5.90
Expected volatility	61.2	%
Expected dividend yield	0.0	%

Schedule of Stock Option Activity

Stock option activity under the 2021 Plan for the three months ended September 30, 2022 (there were no stock options granted previously under this plan) was as follows:

	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Outstanding at June 30, 2022	—	$	—	$	—	—
Granted	101	1.98
Exercised	—	—
Forfeited or expired	—	—
Outstanding at September 30, 2022	101	$	1.98	$	—	9.89
Vested and exercisable	—	$	—	$	—	—

Stock option activity under the 2018 Plan for the quarterly periods ended September 30, 2022 was as follows:

	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2022	3,851	$	1.77
Exercised	(114)	1.12
Forfeited or expired	(56)	1.08
Outstanding at March 31, 2022	3,681	$	1.78	$	23,918	8.62
Exercised	(29)	$	1.05
Forfeited or expired	(3)	$	2.30
Outstanding at June 30, 2022	3,649	$	1.78	$	11,307	8.35
Exercised	(5)	0.79
Forfeited or expired	(110)	7.75
Outstanding at September 30, 2022 1	3,534	$	1.60	$	84	8.29
Vested and exercisable	1,849	$	1.18	$	82	7.80

1 Includes 2,478, 0, and 1,056 of awards accounted for as service-based, performance-based, and market-based options, respectively, that are vested, that the Company currently deems probable of vesting, or in the case of market-based options, that the Company is expensing so long as the respective service conditions are met. The performance options vest only if gross revenue equals or exceeds certain thresholds for the years ending December 31, 2022 and 2023, while the market-based options will vest only if the price of the Company's common stock reaches a $1,000,000 market capitalization target for any 20 days during a 30-day period on or before the fourth anniversary of the closing of the Merger.

Schedule of Restricted Stock Unit Activity

Restricted stock unit activity under the 2021 Plan for the three months ended September 30, 2022 (there were no restricted stock units granted previously under this plan) was as follows:

	Number of Shares	Weighted Average Grant Date Fair Value		Total Fair Value
Unvested at June 30, 2022	—	$	—
Granted	1,228	1.98		$	2,432
Vested	(173)	1.98		$	325
Forfeited	(65)	1.98
Unvested at September 30, 2022	990	$	1.98

Schedule of Stock-Based Compensation Expense

The following tables presents the classification of stock-based compensation expense under the 2018 Plan and the 2021 Plan:

	Three Months Ended September 30, 2022				Nine Months Ended September 30,
	2022		2021		2022		2021
Sales and marketing	$	77	$	15	$	137	$	65
Product development	86		14		123		126
General and administrative	608		179		2,899		538
	$	771	$	208	$	3,159	$	729

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Net Income (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Schedule of Computation Basic and Diluted Net Income (Loss) Per Share

The following table presents the computation of basic and diluted net income (loss) per share attributable to common stockholders, as a group, for the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss) (A)	$	15,454	$	(4,454)	$	10,837	$	(6,880)
Income impact of FPAs	(3,939)		—		(346)		—
Income impact of convertible promissory notes	600		—		—		—
Total undistributed income (loss) (B)	12,115		(4,454)		10,491		(6,880)
Weighted average shares outstanding (C)	35,580		24,923		35,260		24,832
Dilutive effect of FPAs	3,547		—		1,140		—
Dilutive effect of convertible promissory notes	2,477		—		—		—
Dilutive effect of stock-based awards	1,611		—		2,304		—
Common stock and common stock equivalents (D)	43,215		24,923		38,704		24,832
Net income (loss) per share:
Basic (A/C)	$	0.43	$	(0.18)	$	0.31	$	(0.28)
Diluted (B/D)	$	0.28	$	(0.18)	$	0.27	$	(0.28)

Following are the calculations of basic and diluted net income (loss) per share for each class of common stock (refer to the tables above for the impact of common stock equivalents on common shares for the three and nine months ended September 30, 2022):

	Three Months Ended September 30, 2022		Three Months Ended September 30, 2021
	Common		Class 1		Class 2		Class 3
Net income (loss)	$	15,454	$	(1,676)	$	(2,458)	$	(320)
Weighted average shares outstanding	35,580		9,379		13,755		1,789
Common stock and common stock equivalents	43,215		9,379		13,755		1,789
Basic net income (loss) per share	$	0.43	$	(0.18)	$	(0.18)	$	(0.18)
Diluted net income (loss) per share	$	0.28	$	(0.18)	$	(0.18)	$	(0.18)

	Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021
	Common		Class 1		Class 2		Class 3
Net loss	$	10,837	$	(2,598)	$	(3,811)	$	(471)
Weighted average shares outstanding	35,260		9,379		13,755		1,698
Common stock and common stock equivalents	38,704		9,379		13,755		1,698
Basic net income (loss) per share	$	0.31	$	(0.28)	$	(0.28)	$	(0.28)
Diluted net income (loss) per share	$	0.27	$	(0.28)	$	(0.28)	$	(0.28)

Schedule of Antidilutive Shares

The following shares of common stock subject to certain instruments were excluded from the computation of diluted net income per share attributable to common stockholders for the periods presented as their effect would have been antidilutive (with figures recast using the conversion ratio for the Business Combination, as applicable):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Shares subject to warrants	10,451		—		10,451		—
Shares subject to convertible promissory notes	—		12,240		2,428		12,240
Preferred stock	—		6,141		—		6,141
Escrow Shares	1,625		—		1,625		—
Shares subject to outstanding common stock options and RSUs	1,056		3,785		1,056		3,785
Shares subject to stockholder earn-out rights	5,429		—		5,429		—
	$	18,561	$	22,166	$	20,989	$	22,166

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Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Schedule of Segment Revenue and Gross Profit

Segment revenue and gross profit were as follows during the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue:
Retail	$	9,042	$	8,606	$	27,286	$	24,572
Brands	2,739		2,290		7,965		6,387
Total revenue	$	11,781	$	10,896	$	35,251	$	30,959
Gross profit:
Retail	7,979		7,744		24,193		22,339
Brands	2,287		1,891		6,647		5,056
Total gross profit	$	10,266	$	9,635	$	30,840	$	27,395

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents information about the Company’s derivative liabilities that are measured at fair value on a recurring basis beginning February 4, 2022 (the date of closing of the Business Combination) when the derivative liabilities were assumed, and discloses the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description	Level	Fair Value at September 30, 2022		Fair Value at June 30, 2022		Fair Value at February 4, 2022		Gain (Loss) Three Months Ended September 30, 20221		Gain (Loss) Nine Months Ended September 30, 20221
Private Warrants derivative liability	3	$	662	$	3,693	$	3,916	$	3,031	$	3,254
Forward share purchase agreements derivative liability 2	3	—		17,763		14,170		3,939		346
Escrow Shares derivative liability	3	47		3,481		6,868		3,434		6,821
Stockholder earn-out rights derivative liability	3	288		12,147		26,131		11,859		25,843
Total		$	997	$	37,084	$	51,085	22,264		$	36,264

1 Totals may not foot due to rounding.

2 The forward share purchase agreements were settled effective August 1, 2022, at which time the fair value was $13,824 based on cash settlement.

Schedule of Valuation Assumptions

The Private Warrants were valued using a Black-Scholes model and the following Level 3 inputs:

	September 30, 2022		June 30, 2022		February 4, 2022
Exercise price	$	11.50	$	11.50	$	11.50
Stock price	$	0.68	$	4.50	$	6.53
Volatility	98.0%		51.6%		34.3%
Term (in years)	4.34		4.59		5.00
Risk-free rate	4.1%		3.0%		1.8%
Dividend yield	0.0%		0.0%		0.0%

The FPAs were valued using a Black-Scholes model and the following Level 3 inputs:

	September 30, 2022	June 30, 2022		February 4, 2022
Exercise price - one agreement	N/A	$	10.31	$	10.16
Exercise price - three agreements	N/A	$	10.16	$	10.01
Stock price	N/A	$	4.50	$	6.53
Volatility	N/A	70.4%		63.9%
Term (in years)	N/A	0.09		0.24
Risk-free rate	N/A	1.3%		0.2%
Dividend yield	N/A	0.0%		0.0%

The Escrow Shares derivative liability was calculated using a binomial lattice model and the following Level 3 inputs:

	September 30, 2022		June 30, 2022		February 4, 2022
First stock price trigger	$	13.50	$	13.50	$	13.50
Second stock price trigger	$	15.50	$	15.50	$	15.50
Stock price	$	0.68	$	4.50	$	6.53
Volatility	79.0%		68.0%		64.0%
Term (in years)	2.34		2.59		3.00
Risk-free rate	4.2%		3.0%		1.6%
Dividend yield	0.0%		0.0%		0.0%

The stockholder earn-out rights were valued using a binomial lattice model and the following Level 3 inputs:

	September 30, 2022		June 30, 2022		February 4, 2022
First stock price trigger	$	13.50	$	13.50	$	13.50
Second stock price trigger	$	15.50	$	15.50	$	15.50
First revenue trigger	$	65,000	$	65,000	$	65,000
Second revenue trigger	$	101,000	$	101,000	$	101,000
Stock price	$	0.68	$	4.50	$	6.53
2022 Revenue assumption	$	47,500	$	49,500	$	55,500
Volatility	79.0%		68.0%		64.0%
Term (in years)	2.34		2.59		3.00
Risk-free rate	4.2%		3.0%		1.6%
Dividend yield	0.0%		0.0%		0.0%

XML

Description of the Business and Merger Transaction - Significant Sources and Uses of Cash (Details) $ in Thousands		8 Months Ended	9 Months Ended
	Feb. 04, 2022 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)
Schedule Of Reverse Recapitalization [Line Items]
Merida expenses paid from the Trust at closing			$ 10,761	$ 0
Net cash from the Trust to Leafly at closing	$ 582	$ 8,671
Cash released from escrow		$ 8,089
Convertible Senior Notes | 2021 Notes
Schedule Of Reverse Recapitalization [Line Items]
Conversion ratio	0.3283
Merida
Schedule Of Reverse Recapitalization [Line Items]
Amount in Merida's trust account ("the Trust") at closing	$ 90,824
Total payment to Merida public redeeming stockholders	49,466
Amount available after paying Merida redeeming stockholders	41,358
Cash to escrow for Forward Share Purchase Agreements (see Note 13)	39,032
Remaining balance	2,326
Merida expenses paid from the Trust at closing	$ 1,744

XML

Description of the Business and Merger Transaction - Reconciliation of Common Shares (Details) - shares shares in Thousands	Feb. 04, 2022	Feb. 03, 2022	Dec. 31, 2021
Schedule Of Reverse Recapitalization [Line Items]
Common stock, outstanding (in shares)	42,924		25,086
Leafly existing securityholders (in shares)	35,434
Merida
Schedule Of Reverse Recapitalization [Line Items]
Common stock, outstanding (in shares)		7,490
Merida | Public stockholders
Schedule Of Reverse Recapitalization [Line Items]
Common stock, outstanding (in shares)		4,160
Merida | Initial stockholders
Schedule Of Reverse Recapitalization [Line Items]
Common stock, outstanding (in shares)		1,667
Merida | Noteholders
Schedule Of Reverse Recapitalization [Line Items]
Common stock, outstanding (in shares)		38
Merida | Sponsor, escrow shares
Schedule Of Reverse Recapitalization [Line Items]
Common stock, outstanding (in shares)		1,625

XML

Basis of Presentation and Significant Accounting Policies (Details)	9 Months Ended
	Sep. 30, 2022
Internal-use software
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years

XML

Cash, Cash Equivalents, and Restricted Cash - Schedule (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Cash and Cash Equivalents [Abstract]
Cash and cash equivalents	$ 27,829	$ 28,565
Restricted cash	607	130
Cash, cash equivalents, and restricted cash	$ 28,436	$ 28,695	$ 33,246	$ 4,934

XML

Cash, Cash Equivalents, and Restricted Cash - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2022	Feb. 04, 2022	Dec. 31, 2021
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 607		$ 130
Purchase of treasury stock	0
Escrow deposit
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 360	$ 39,032

XML

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid insurance	$ 2,065	$ 57
Other prepaid expenses	1,441	1,134
Other current assets	63	156
Prepaid expenses and other current assets	$ 3,569	$ 1,347

XML

Accounts Receivable, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	$ 1,469	$ 1,142	$ 1,848	$ 1,131
Add: provision for doubtful accounts, net of recoveries	383	529	1,023	841
Less: write-offs	(894)	(93)	(1,913)	(394)
Balance, end of period	$ 958	$ 1,578	$ 958	$ 1,578

XML

Property, Equipment and Software, Net - Schedule (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 2,983	$ 1,051
Less: accumulated depreciation and amortization	(770)	(738)
Property, equipment, and software, net	2,213	313
Furniture and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	902	1,049
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	0	2
Internal-use software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 2,081	$ 0

XML

Property, Equipment and Software, Net - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 38	$ 57	$ 135	$ 195
Amortization of internal-use software	$ 90	$ 0	$ 141	$ 0

XML

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued bonuses	$ 537	$ 3,668
Other employee-related liabilities	2,547	2,131
Accrued interest	400	1,313
Other accrued expenses	1,592	1,213
Accrued expenses and other current liabilities	$ 5,076	$ 8,325
CEO
Accrued Expenses [Line Items]
Bonus, percentage of base salary	50.00%
Other named executive officers
Accrued Expenses [Line Items]
Bonus, percentage of base salary	40.00%

XML

Revenue and Contract Balances - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Revenue	$ 11,781	$ 10,896	$ 35,251	$ 30,959
Retail
Disaggregation of Revenue [Line Items]
Revenue	9,042	8,606	27,286	24,572
Brands
Disaggregation of Revenue [Line Items]
Revenue	2,739	2,290	7,965	6,387
Over time
Disaggregation of Revenue [Line Items]
Revenue	10,801	10,187	32,353	29,163
Over time | Retail
Disaggregation of Revenue [Line Items]
Revenue	9,042	8,606	27,286	24,572
Over time | Brands
Disaggregation of Revenue [Line Items]
Revenue	1,759	1,581	5,067	4,591
Point in time | Brands
Disaggregation of Revenue [Line Items]
Revenue	980	709	2,898	1,796
United States
Disaggregation of Revenue [Line Items]
Revenue	11,140	9,757	32,787	27,644
United States | Reclassification due to change in calculation method
Disaggregation of Revenue [Line Items]
Revenue	11,335	10,041	33,491	28,204
All other countries
Disaggregation of Revenue [Line Items]
Revenue	641	1,139	2,464	3,315
All other countries | Reclassification due to change in calculation method
Disaggregation of Revenue [Line Items]
Revenue	$ 446	$ 855	$ 1,760	$ 2,755
Arizona | Revenue | Geographic concentration risk
Disaggregation of Revenue [Line Items]
Concentration risk percentage	19.00%	16.00%	18.00%	16.00%
California | Revenue | Geographic concentration risk
Disaggregation of Revenue [Line Items]
Concentration risk percentage	13.00%	11.00%	11.00%	10.00%
Oregon | Revenue | Geographic concentration risk
Disaggregation of Revenue [Line Items]
Concentration risk percentage	10.00%	11.00%	10.00%	12.00%
Advertising
Disaggregation of Revenue [Line Items]
Revenue	$ 11,731	$ 10,840	$ 34,959	$ 30,813
Other services
Disaggregation of Revenue [Line Items]
Revenue	$ 50	$ 56	$ 292	$ 146

XML

Revenue and Contract Balances - Deferred Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Change in Contract with Customer, Liability [Roll Forward]
Balance, beginning of period	$ 2,467	$ 2,079	$ 1,975	$ 1,585
Add: net increase in current period contract liabilities	1,630	1,947	1,976	2,112
Less: revenue recognized from beginning balance	(2,045)	(1,847)	(1,899)	(1,518)
Balance, end of period	$ 2,052	$ 2,179	$ 2,052	$ 2,179

XML

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Operating Loss Carryforwards [Line Items]
Effective tax rate	0.00%	0.00%	0.00%	0.00%
Unrecognized tax benefits	$ 0		$ 0		$ 0
Unrecognized tax benefits, accrued interest and penalties	$ 0		$ 0		0
Federal
Operating Loss Carryforwards [Line Items]
Net operating loss carryforward					53,904
State
Operating Loss Carryforwards [Line Items]
Net operating loss carryforward					35,976
Foreign
Operating Loss Carryforwards [Line Items]
Net operating loss carryforward					$ 4,303

XML

Convertible Promissory Notes (Details) - Convertible Senior Notes $ / shares in Units, shares in Thousands, $ in Thousands		1 Months Ended
	Feb. 04, 2022 $ / shares shares	Jan. 31, 2022 USD ($) day $ / shares	Sep. 30, 2022 USD ($)	Aug. 31, 2021 USD ($)	Jun. 30, 2021 USD ($)
2022 Notes
Debt Instrument [Line Items]
Aggregate principal amount		$ 30,000
Debt issuance costs		714
Debt discount		$ 924
Interest rate		8.00%
Conversion share price (in usd per share) | $ / shares		$ 12.50
Stock price trigger (in usd per share) | $ / shares		$ 18.00
Threshold trading days | day		20
Threshold consecutive trading days | day		30
Redemption price percentage		100.00%
Repurchase price percentage		100.00%
Net carrying amount			$ 28,726
Unamortized issuance costs			1,274
2022 Notes | Level 3
Debt Instrument [Line Items]
Fair value			$ 23,000
2021 Notes
Debt Instrument [Line Items]
Aggregate principal amount				$ 7,500	$ 23,970
Interest rate				8.00%
Conversion share price (in usd per share) | $ / shares	$ 2.63
Conversion of stock (in shares) | shares	4,128
Percent of implied price per share	80.00%
Conversion ratio	0.3283

XML

Stockholders' Equity (Details) $ / shares in Units, $ in Thousands			3 Months Ended	9 Months Ended
	Aug. 01, 2022 USD ($) $ / shares shares	Feb. 04, 2022 USD ($) day $ / shares shares	Sep. 30, 2022 USD ($) class vote $ / shares shares	Sep. 30, 2022 USD ($) class vote $ / shares shares	Sep. 30, 2021 USD ($)	Dec. 31, 2021 $ / shares shares
Schedule Of Reverse Recapitalization [Line Items]
Common stock, authorized (in shares)			200,000,000	200,000,000		69,361,000
Common stock, par value (in usd per share) | $ / shares			$ 0.0001	$ 0.0001		$ 0.0001
Preferred stock, authorized (in shares)			5,000,000	5,000,000		6,578,000
Preferred stock, par value (in usd per share) | $ / shares			$ 0.0001	$ 0.0001		$ 0.0001
Common stock, number of votes per share | vote			1	1
Board of directors, number of classes | class			3	3
Board of directors, term				3 years
Purchase of treasury stock | $			$ 0
Preferred stock, issued (in shares)			0	0		6,140,000
Preferred stock, outstanding (in shares)			0	0		6,140,000
Repurchase of common stock in other accrued expenses | $				$ 360	$ 0
Common
Schedule Of Reverse Recapitalization [Line Items]
Stock repurchased (in shares)	3,081,000
Treasury stock (in usd per share) | $ / shares	$ 10.28
Purchase of treasury stock | $	$ 31,663
Common | Payment using Restricted Cash
Schedule Of Reverse Recapitalization [Line Items]
Purchase of treasury stock | $	31,303
Common | Remaining in Accrued Expenses and Other Current Liabilities
Schedule Of Reverse Recapitalization [Line Items]
Purchase of treasury stock | $	$ 360
Sponsor, escrow shares
Schedule Of Reverse Recapitalization [Line Items]
Earn-out shares (in shares)		1,625,000	5,429,000	5,429,000
Leafly stockholders
Schedule Of Reverse Recapitalization [Line Items]
Earn-out shares (in shares)		5,429,000
Derivative instrument, period, one | Sponsor, escrow shares
Schedule Of Reverse Recapitalization [Line Items]
Earn-out shares, percentage of shares released from escrow		50.00%
Earn-out shares, earn-out period, stock price trigger (in usd per share) | $ / shares		$ 13.50
Earn-out shares, earn-out period		2 years
Derivative instrument, period, one | Leafly stockholders
Schedule Of Reverse Recapitalization [Line Items]
Earn-out shares (in shares)		2,715,000
Earn-out shares, earn-out period, stock price trigger (in usd per share) | $ / shares		$ 13.50
Earn-out shares, earn-out period		2 years
Earn-out shares, revenue target | $		$ 65,000
Earn-out shares, threshold trading days | day		20
Earn-out shares, threshold consecutive trading days		30 days
Earn-out shares, pro rate percentage of shares		50.00%
Earn-out shares, percentage of revenue target		90.00%
Derivative instrument, period, two | Sponsor, escrow shares
Schedule Of Reverse Recapitalization [Line Items]
Earn-out shares, percentage of shares released from escrow		50.00%
Earn-out shares, earn-out period, stock price trigger (in usd per share) | $ / shares		$ 15.50
Earn-out shares, earn-out period		3 years
Derivative instrument, period, two | Leafly stockholders
Schedule Of Reverse Recapitalization [Line Items]
Earn-out shares (in shares)		2,715,000
Earn-out shares, earn-out period, stock price trigger (in usd per share) | $ / shares		$ 15.50
Earn-out shares, earn-out period		3 years
Earn-out shares, revenue target | $		$ 101,000
Earn-out shares, threshold trading days | day		20
Earn-out shares, threshold consecutive trading days		30 days
Earn-out shares, pro rate percentage of shares		50.00%
Earn-out shares, percentage of revenue target		90.00%

XML

Warrants and Forward Purchase Share Agreements - Warrants (Details) shares in Thousands	9 Months Ended
	Sep. 30, 2022 day $ / shares shares	Dec. 31, 2021 shares
Public Warrants
Class of Warrant or Right [Line Items]
Warrants outstanding (in shares) | shares	6,501	6,501
Warrants, exercise price (in usd per share)	$ 11.50
Warrants, exercisable, period from completion of a merger	30 days
Warrants, exercisable, period from closing of IPO	12 months
Warrants expiration period	5 years
Redemption price of warrants (in usd per share)	$ 0.01
Redemption notice period	30 days
Redemption stock price trigger (in usd per share)	$ 18.00
Redemption stock price threshold trading days | day	20
Redemption stock price threshold consecutive trading days	30 days
Private Warrants
Class of Warrant or Right [Line Items]
Warrants outstanding (in shares) | shares	3,950	3,950

XML

Warrants and Forward Purchase Share Agreements - Forward Share Purchase Agreements (Details) $ / shares in Units, shares in Thousands, $ in Thousands		2 Months Ended	3 Months Ended	9 Months Ended
	Aug. 01, 2022 USD ($) shares	Jan. 31, 2022 agreement $ / shares shares	Sep. 30, 2022 USD ($)	Sep. 30, 2022 USD ($)	May 03, 2022 $ / shares shares	Feb. 04, 2022 USD ($)	Dec. 31, 2021 USD ($) $ / shares shares
Derivative [Line Items]
Number of FPAs | agreement		4
FPAs, number of shares (in shares) | shares		4,000
Restricted cash			$ 607	$ 607			$ 130
FPAs, term		3 months
Release of restricted cash from escrow			720	8,089
Purchase of treasury stock			0
Common
Derivative [Line Items]
Stock repurchased (in shares) | shares	3,081
Purchase of treasury stock	$ 31,663
Escrow deposit
Derivative [Line Items]
Restricted cash			$ 360	$ 360		$ 39,032
Escrow deposit | Common
Derivative [Line Items]
Restricted cash	$ 360
Derivative instrument, period, one
Derivative [Line Items]
FPAs, number of shares (in shares) | shares		2,600			2,404
FPAs, exercise price (in usd per share) | $ / shares		$ 10.16			$ 10.31
Derivative instrument, period, two
Derivative [Line Items]
FPAs, number of shares (in shares) | shares					686		1,400
FPAs, exercise price (in usd per share) | $ / shares					$ 10.16		$ 10.01

XML

Equity Incentive Plans - Narrative (Details) $ / shares in Units, shares in Thousands, $ in Thousands		1 Months Ended	3 Months Ended		9 Months Ended	12 Months Ended
	Feb. 04, 2022 USD ($) day shares	May 31, 2021 $ / shares shares	Sep. 30, 2022 USD ($) plan $ / shares shares	Mar. 31, 2022 USD ($) shares	Sep. 30, 2022 USD ($) plan $ / shares shares	Dec. 31, 2021 USD ($) shares	Jan. 01, 2023 shares	Jun. 30, 2022 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity plans | plan			4		4
Options granted (in shares)			0		0
Options modified (in shares)	2,917
Options modified, expense | $				$ 1,366
Service-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost | $			$ 1,219		$ 1,219
Unrecognized compensation cost, recognition period					2 years 1 month 17 days
Market-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost | $			$ 1,687		$ 1,687
Unrecognized compensation cost, recognition period					1 year 6 months 18 days
Options outstanding (in shares)	1,458					1,458
Market capitalization target, threshold consecutive days	30 days
Market-based awards | Vesting tranche one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	50.00%
Market-based awards | Vesting tranche two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	50.00%
Performance-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)	1,458					1,458
Vesting percentage				33.33%
Performance-based awards | Vesting tranche one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Revenue target one | $	$ 65,000					$ 75,000
Vesting percentage	50.00%
Revenue target percentage	90.00%
Performance-based awards | Vesting tranche two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Revenue target two | $	$ 101,000					150,000
Vesting percentage	50.00%
Revenue target percentage	90.00%
Performance-based awards | Vesting tranche three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Revenue target three | $						$ 300,000
2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)			101
Common stock reserved for issuance (in shares)	4,502
Granted (in usd per share) | $ / shares			$ 1.98
Options outstanding (in shares)			101		101			0
2021 Plan | Stock option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost | $			$ 114		$ 114
Unrecognized compensation cost, recognition period					3 years 4 months 9 days
Options granted, weighted average grant-date fair value (in usd per share) | $ / shares			$ 1.16		$ 1.16
2021 Plan | Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments other than options, grants in period (in shares)			1,228
Total unrecognized compensation cost | $			$ 1,825		$ 1,825
Unrecognized compensation cost, recognition period					3 years 4 months 2 days
2021 Plan | Forecast
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance, annual increase percentage							10.00%
Common stock reserved for issuance, annual increase (in shares)							4,502
2018 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)		2,191
Granted (in usd per share) | $ / shares		$ 1.10
Options outstanding (in shares)			3,534	3,681	3,534	3,851		3,649
2018 Plan | Service-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)			2,478		2,478
2018 Plan | Market-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)			1,056		1,056
Market capitalization target | $	$ 1,000,000
Market capitalization target, threshold days | day	20
Market capitalization target, threshold consecutive days	30 days
2018 Plan | Performance-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)			0		0
Earn-Out Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)	571
Earn-Out Plan | Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments other than options, grants in period (in shares)					0

XML

Equity Incentive Plans - Weighted-Average Assumptions Used in Option Pricing Model (Details) - Stock Option	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021
2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	4.10%	4.10%
Expected term in years		4 years 21 days
Expected volatility	74.60%	74.60%
Expected dividend yield	0.00%	0.00%
2018 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate			1.00%
Expected term in years			5 years 10 months 24 days
Expected volatility			61.20%
Expected dividend yield			0.00%

XML

Equity Incentive Plans - Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands		1 Months Ended	3 Months Ended			9 Months Ended
	Feb. 04, 2022 USD ($) day shares	May 31, 2021 $ / shares shares	Sep. 30, 2022 USD ($) $ / shares shares	Jun. 30, 2022 USD ($) $ / shares shares	Mar. 31, 2022 USD ($) $ / shares shares	Sep. 30, 2022 USD ($) $ / shares shares
Number of Shares
Granted (in shares)			0			0
Performance-based awards
Number of Shares
Outstanding (in shares)					1,458	1,458
Outstanding (in shares)	1,458
Market-based awards
Number of Shares
Outstanding (in shares)					1,458	1,458
Outstanding (in shares)	1,458
Weighted Average Remaining Contractual Term (in years)
Market capitalization target, threshold consecutive days	30 days
2021 Plan
Number of Shares
Outstanding (in shares)			0
Granted (in shares)			101
Exercised (in shares)			0
Forfeited or expired (in shares)			0
Outstanding (in shares)			101	0		101
Vested and exercisable (in shares)			0			0
Weighted Average Exercise Price
Outstanding (in usd per share) | $ / shares			$ 0
Granted (in usd per share) | $ / shares			1.98
Exercised (in usd per share) | $ / shares			0
Forfeited or expired (in usd per share) | $ / shares			0
Outstanding (in usd per share) | $ / shares			1.98	$ 0		$ 1.98
Vested and exercisable (in usd per share) | $ / shares			$ 0			$ 0
Aggregate Intrinsic Value
Outstanding | $			$ 0	$ 0		$ 0
Vested and exercisable | $			$ 0			$ 0
Weighted Average Remaining Contractual Term (in years)
Outstanding			9 years 10 months 20 days	0 years
Vested and exercisable						0 years
2018 Plan
Number of Shares
Outstanding (in shares)			3,649	3,681	3,851	3,851
Granted (in shares)		2,191
Exercised (in shares)			(5)	(29)	(114)
Forfeited or expired (in shares)			(110)	(3)	(56)
Outstanding (in shares)			3,534	3,649	3,681	3,534
Vested and exercisable (in shares)			1,849			1,849
Weighted Average Exercise Price
Outstanding (in usd per share) | $ / shares			$ 1.78	$ 1.78	$ 1.77	$ 1.77
Granted (in usd per share) | $ / shares		$ 1.10
Exercised (in usd per share) | $ / shares			0.79	1.05	1.12
Forfeited or expired (in usd per share) | $ / shares			7.75	2.30	1.08
Outstanding (in usd per share) | $ / shares			1.60	$ 1.78	$ 1.78	1.60
Vested and exercisable (in usd per share) | $ / shares			$ 1.18			$ 1.18
Aggregate Intrinsic Value
Outstanding | $			$ 84	$ 11,307	$ 23,918	$ 84
Vested and exercisable | $			$ 82			$ 82
Weighted Average Remaining Contractual Term (in years)
Outstanding			8 years 3 months 14 days	8 years 4 months 6 days	8 years 7 months 13 days
Vested and exercisable						7 years 9 months 18 days
2018 Plan | Service-based awards
Number of Shares
Outstanding (in shares)			2,478			2,478
2018 Plan | Performance-based awards
Number of Shares
Outstanding (in shares)			0			0
2018 Plan | Market-based awards
Number of Shares
Outstanding (in shares)			1,056			1,056
Weighted Average Remaining Contractual Term (in years)
Market capitalization target | $	$ 1,000,000
Market capitalization target, threshold days | day	20
Market capitalization target, threshold consecutive days	30 days

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Equity Incentive Plans - Restricted Stock Unit (Details) - 2021 Plan - Restricted Stock Units (RSUs) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2022 USD ($) $ / shares shares
Number of Shares
Beginning balance (in shares) | shares	0
Granted (in shares) | shares	1,228
Vested (in shares) | shares	(173)
Forfeited (in shares) | shares	(65)
Ending balance (in shares) | shares	990
Weighted Average Grant Date Fair Value
Beginning balance (in usd per share) | $ / shares	$ 0
Granted (in usd per share) | $ / shares	1.98
Vested (in usd per share) | $ / shares	1.98
Forfeited (in usd per share) | $ / shares	1.98
Ending balance (in usd per share) | $ / shares	$ 1.98
Granted, fair value | $	$ 2,432
Vested, fair value | $	$ 325

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Equity Incentive Plans - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 771	$ 208	$ 3,159	$ 729
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	77	15	137	65
Product development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	86	14	123	126
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 608	$ 179	$ 2,899	$ 538

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Employee Stock Purchase Plan (Details) - Employee Stock - shares shares in Thousands	Jan. 01, 2023	Feb. 04, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)		1,126
Forecast
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance, annual increase percentage	2.50%
Common stock reserved for issuance, annual increase (in shares)	1,126

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Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Aug. 31, 2021	Jun. 30, 2021
Related Party Transactions [Abstract]
Related party revenue	$ 0	$ 11	$ 0	$ 125
2021 Notes | Convertible Senior Notes
Related Party Transaction [Line Items]
Aggregate principal amount					$ 7,500	$ 23,970
Significant investor | 2021 Notes | Convertible Senior Notes
Related Party Transaction [Line Items]
Aggregate principal amount						$ 1,000

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Defined Contribution Plan (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Retirement Benefits [Abstract]
Expense from matching contributions	$ 225	$ 159	$ 684	$ 528

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Net Income (Loss) Per Share - Narrative (Details) - shares shares in Thousands	Sep. 30, 2022	Feb. 04, 2022
Sponsor, escrow shares
Schedule Of Reverse Recapitalization [Line Items]
Earn-out shares (in shares)	5,429	1,625

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Net Income (Loss) Per Share - Computation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income (loss)	$ 15,454	$ 14,759	$ (19,376)	$ (4,454)	$ (1,317)	$ (1,109)	$ 10,837	$ (6,880)
Income impact of FPAs	(3,939)			0			(346)	0
Income impact of convertible promissory notes	600			0			0	0
Total undistributed income (loss)	$ 12,115			$ (4,454)			$ 10,491	$ (6,880)
Weighted average shares outstanding (in shares)	35,580			24,923			35,260	24,832
Dilutive effect of FPAs (in shares)	3,547			0			1,140	0
Dilutive effect of convertible promissory notes (in shares)	2,477			0			0	0
Dilutive effect of stock-based awards (in shares)	1,611			0			2,304	0
Common stock and common stock equivalents (in shares)	43,215			24,923			38,704	24,832
Basic net income (loss) per share (in usd per share)	$ 0.43			$ (0.18)			$ 0.31	$ (0.28)
Diluted net income (loss) per share (in usd per share)	$ 0.28			$ (0.18)			$ 0.27	$ (0.28)
Common
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income (loss)	$ 15,454						$ 10,837
Weighted average shares outstanding (in shares)	35,580						35,260
Common stock and common stock equivalents (in shares)	43,215						38,704
Basic net income (loss) per share (in usd per share)	$ 0.43						$ 0.31
Diluted net income (loss) per share (in usd per share)	$ 0.28						$ 0.27
Class 1
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income (loss)				$ (1,676)				$ (2,598)
Weighted average shares outstanding (in shares)				9,379				9,379
Common stock and common stock equivalents (in shares)				9,379				9,379
Basic net income (loss) per share (in usd per share)				$ (0.18)				$ (0.28)
Diluted net income (loss) per share (in usd per share)				$ (0.18)				$ (0.28)
Class 2
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income (loss)				$ (2,458)				$ (3,811)
Weighted average shares outstanding (in shares)				13,755				13,755
Common stock and common stock equivalents (in shares)				13,755				13,755
Basic net income (loss) per share (in usd per share)				$ (0.18)				$ (0.28)
Diluted net income (loss) per share (in usd per share)				$ (0.18)				$ (0.28)
Class 3
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income (loss)				$ (320)				$ (471)
Weighted average shares outstanding (in shares)				1,789				1,698
Common stock and common stock equivalents (in shares)				1,789				1,698
Basic net income (loss) per share (in usd per share)				$ (0.18)				$ (0.28)
Diluted net income (loss) per share (in usd per share)				$ (0.18)				$ (0.28)

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Net Income (Loss) Per Share - Antidilutive Shares (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	18,561	22,166	20,989	22,166
Shares subject to warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	10,451	0	10,451	0
Shares subject to convertible promissory notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	0	12,240	2,428	12,240
Preferred stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	0	6,141	0	6,141
Escrow Shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	1,625	0	1,625	0
Shares subject to outstanding common stock options and RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	1,056	3,785	1,056	3,785
Shares subject to stockholder earn-out rights
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	5,429	0	5,429	0

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Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting Information [Line Items]
Revenue	$ 11,781	$ 10,896	$ 35,251	$ 30,959
Gross profit	10,266	9,635	30,840	27,395
Retail
Segment Reporting Information [Line Items]
Revenue	9,042	8,606	27,286	24,572
Gross profit	7,979	7,744	24,193	22,339
Brands
Segment Reporting Information [Line Items]
Revenue	2,739	2,290	7,965	6,387
Gross profit	$ 2,287	$ 1,891	$ 6,647	$ 5,056

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Fair Value Measurements - Derivative Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Aug. 01, 2022	Jun. 30, 2022	Feb. 04, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain (loss)	$ 22,264	$ 0	$ 36,264	$ 0
Forward share purchase agreements derivative liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability					$ 13,824
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	997		997			$ 37,084	$ 51,085
Gain (loss)	22,264		36,264
Level 3 | Private warrants derivative liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	662		662			3,693	3,916
Gain (loss)	3,031		3,254
Level 3 | Forward share purchase agreements derivative liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	0		0			17,763	14,170
Gain (loss)	3,939		346
Level 3 | Escrow shares derivative liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	47		47			3,481	6,868
Gain (loss)	3,434		6,821
Level 3 | Stockholder earn-out rights derivative liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	288		288			$ 12,147	$ 26,131
Gain (loss)	$ 11,859		$ 25,843

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Fair Value Measurements - Valuation Assumptions (Details) uSD in Thousands		3 Months Ended
	Feb. 04, 2022 $ / shares uSD	Sep. 30, 2022 $ / shares uSD	Jun. 30, 2022 $ / shares uSD
Private warrants derivative liability | Exercise price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	11.50	11.50	11.50
Private warrants derivative liability | Stock price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	6.53	0.68	4.50
Private warrants derivative liability | Volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.343	0.980	0.516
Private warrants derivative liability | Term (in years)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative, term	5 years	4 years 4 months 2 days	4 years 7 months 2 days
Private warrants derivative liability | Risk-free rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.018	0.041	0.030
Private warrants derivative liability | Dividend yield
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.000	0.000	0.000
Forward share purchase agreements derivative liability | Exercise price one
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	10.16		10.31
Forward share purchase agreements derivative liability | Exercise price two
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	10.01		10.16
Forward share purchase agreements derivative liability | Stock price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	6.53		4.50
Forward share purchase agreements derivative liability | Volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.639		0.704
Forward share purchase agreements derivative liability | Term (in years)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative, term	2 months 26 days		1 month 2 days
Forward share purchase agreements derivative liability | Risk-free rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.002		0.013
Forward share purchase agreements derivative liability | Dividend yield
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.000		0.000
Escrow shares derivative liability | First stock price trigger
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	13.50	13.50	13.50
Escrow shares derivative liability | Second stock price trigger
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	15.50	15.50	15.50
Escrow shares derivative liability | Stock price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	6.53	0.68	4.50
Escrow shares derivative liability | Volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.640	0.790	0.680
Escrow shares derivative liability | Term (in years)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative, term	3 years	2 years 4 months 2 days	2 years 7 months 2 days
Escrow shares derivative liability | Risk-free rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.016	0.042	0.030
Escrow shares derivative liability | Dividend yield
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.000	0.000	0.000
Stockholder earn-out rights derivative liability | First stock price trigger
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	13.50	13.50	13.50
Stockholder earn-out rights derivative liability | Second stock price trigger
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	15.50	15.50	15.50
Stockholder earn-out rights derivative liability | First revenue trigger
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input | uSD	65,000	65,000	65,000
Stockholder earn-out rights derivative liability | Second revenue trigger
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input | uSD	101,000	101,000	101,000
Stockholder earn-out rights derivative liability | Stock price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	6.53	0.68	4.50
Stockholder earn-out rights derivative liability | 2022 Revenue assumption
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input | uSD	55,500	47,500	49,500
Stockholder earn-out rights derivative liability | Volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.640	0.790	0.680
Stockholder earn-out rights derivative liability | Term (in years)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative, term	3 years	2 years 4 months 2 days	2 years 7 months 2 days
Stockholder earn-out rights derivative liability | Risk-free rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.016	0.042	0.030
Stockholder earn-out rights derivative liability | Dividend yield
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.000	0.000	0.000

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Subsequent Events (Details) $ in Thousands		2 Months Ended	3 Months Ended
	Oct. 06, 2022 shares	Dec. 31, 2022 employee	Dec. 31, 2022 USD ($)
Forecast
Subsequent Event [Line Items]
Expected number of employees to be eliminated | employee		56
Restructuring charges | $			$ 500
Subsequent Event | Restricted stock units
Subsequent Event [Line Items]
Number of shares awarded	512,203
Subsequent Event | Performance-based units | Employee
Subsequent Event [Line Items]
Number of shares awarded	819,721